Is a college degree worth the time and expense involved?
Most people automatically say yes, and in many cases, they are right. But do most people answer yes because they are trained to believe a college degree is valuable? Or do they truly believe a college degree is the best guarantee for a high-paying job? I’m somewhere in the middle.
Last week I went on the record stating that college degrees are overrated. It’s not that I don’t believe a college degree isn’t valuable, I do. I have a college degree, and I know it helped me get my foot in the door to begin my professional career. But I believe some people overvalue a college degree to the extent that they believe it is required to land a high-paying job.
The article I wrote gave some examples of high-paying jobs that don’t require a college degree. One example is my friend, who is an electrician and owns a small business. He brings in roughly $250k per year without a college degree. While these types of jobs exist or, in his case, can be created, they aren’t the standard job for a non-college graduate.
How Much is a College Degree Worth?
A college degree can be worth millions throughout one’s career. A study by the US Census Bureau showed the lifetime earnings of someone with a high school degree topped out, on average, at $1.2 million. A Bachelor’s Degree brought in average lifetime earnings of $2.1 million, and a Master’s Degree $2.5 million.
The following infographic shows the lifetime value of various levels of scholastic achievement and related career information.
Infographic courtesy of GoBankingRates.com.
Some Degrees are More Valuable Than Others
As you can see from the infographic above, a college degree is one valuable piece of paper. In some cases, it can be worth millions of dollars compared to not having a degree. But it’s also important to take these examples in context.
Some very low college paying degrees out there that start in the low $30,000 range and may barely max out in the mid $40,000 range. That wouldn’t be great money if the degree holder had to take out thousands of dollars in student loans to pay for college. That also doesn’t mean you should shoot for one of the highest-paying college degrees if that career field won’t make you happy.
It’s also important to note that a college degree isn’t necessary for a high-paying career. Many high-paying jobs don’t require a degree, especially those with a skill that is always in need. The key to remember is this infographic represents averages, not absolutes.
Top 10 Highest Paying College Degrees
This list covers the starting salary for the top 10 paying undergraduate degrees for 2010. It does not cover the top paying 2-year degrees (such as some nursing degrees), or starting salaries for those with professional degrees, such as doctors, lawyers, MBAs, etc.
The starting salary information was provided by the National Association of Colleges and Employers (NACE) which analyzed data from 200 college career centers at public and private institutions across the United States.
- Petroleum Engineering ($86,220)
- Chemical Engineering ($65,142)
- Mining & Mineral Engineering (incl. Geological) ($64,552)
- Computer Science ($61,205)
- Computer Engineering ($60,879)
- Electrical/Electronics & Communications Engineering ($59,074)
- Mechanical Engineering ($58,392)
- Industrial/Manufacturing Engineering ($57,734)
- Aerospace/Aeronautical/Astronautical Engineering ($57,231)
- Information Sciences & Systems ($54,038)
Keep in mind these salaries are only average starting salaries. They may vary based on location, demand, and additional skills and experience one brings to the table. Also, note that many of these career fields pay well into the six figures at mid-career
Engineering & Computer Degrees Have Highest Starting Salaries
Regardless of which of these two lists you use, it is clear that the top 10 college majors, as far as entry-level salaries are concerned, share a common denominator: they are all based in science or engineering. In the NACE starting salary report, eight of the top 10 highest paying college degrees are engineering degrees, and the other two are related to computers and information sciences. The Pay scale report lists 7 of the top 10 as engineering degrees, two related to computers, and economics (though it appears economics makes this list based on the mid-career salary than starting salary).
What are the Highest Paying Jobs?
The jobs in these lists are some of the top career choices for starting salary, but that does not mean they are the highest paying jobs overall. These lists were compiled to compare starting salaries of jobs requiring a four-year degree. Some jobs that require additional degrees, skills, or certifications may pay more than these jobs, even at the mid-career salaries, you will find on the PayScale chart. Some examples of higher-paying jobs can be found in the medical field (doctors, anesthesiologists, surgeons), lawyers, MBAs, and similar jobs. Many people who get into top management or run a profitable small business also earn more than the top salaries you can earn in the abovementioned jobs.
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The Value of a College Degree
Now let’s talk value. A college degree can be worth much more than the difference in lifetime earnings might suggest. A college degree is required for many jobs, sometimes regardless of whether or not the degree applies to the job. College degrees are often used as a screening tool on job applications as a means to more quickly select qualified job applicants. All else being equal, most employers will hire the job applicant with a college degree over the applicant without a college degree.
Take a quick look at the infographic again; on average, there are fewer unemployed individuals with a Bachelor’s Degree (5.2%) compared to those with no higher than a high school diploma (9.7%). The numbers decrease with each higher level of education.
The value of a college degree may extend to the alumni network, depending on the school. I know several people who were able to get job interviews simply because of the college they attended. In many, but not all, cases they were extended a job offer. You still need the skills to get the job, but a college degree, especially from the right school, can open a lot of doors.
Choosing a Major: 3 Factors to Consider
We’ve established that having a college degree can make a significant impact to your financial well-being. But only if you choose the right major. While it would be nice to follow your passion and get a degree in something you love that you think would be fun, you also need to look at reality.
Recently, I read an article about the worst college majors for a career. Some majors result in high unemployment and low salary. That means getting a job—especially one that pays decently is hard. With the new career landscape, your education must be leveraged in the most beneficial way, depending on what you hope to accomplish.
Here are some things to consider as you choose your college major:
1. Realistically, What Can You DO With Your Major?
Be realistic about what you can do with your major. Yes, if you choose anthropology as a major you can learn about ancient civilizations. But what kind of career can you realistically expect? How many working anthropologists are there? And, once you get your anthropology degree, what else can you do with it? Does anthropology transfer to other career fields with any sort of ease? According to the article, anthropology majors are 2.1 times more likely than average to be working in retail.
Many people joke about my communications degree, but it didn’t make the list, and you can develop skills that can be transferred to a variety of career fields, from media jobs to PR jobs to freelancing. Think about the reality of what you can do with your major, and how likely you are to find actual work that utilizes those skills.
2. Will You Make Enough Money to Be Worth the Cost?
Another consideration is whether or not you can make enough money to repay your student loan debts. There is a debate going on right now about the worth of a college degree. When you’re done with your degree, will you be able to afford the costs? This question is especially important when you move on to graduate school. You have to ask yourself:
- Can I honestly expect to make enough money to make this worth it?
- Are there really jobs out there in this field?
- Does the potential bump in salary justify the expense?
Some degrees are more valuable than others; that’s just the way it is. The market places a premium on certain skills and education. Take that into consideration as you choose your college major.
3. Will You Be Able to Live Your Desired Lifestyle?
Most people don’t become teachers for the money. Instead, they choose that profession for the lifestyle. Longer vacations for holidays, and summers off, can be a lure for many people. Consider whether your degree will help you achieve your desired lifestyle.
Consider, too, that you might be able to enjoy some of your hobbies without getting a degree in those areas. One of the pieces of advice I received in college was this: Choose a major that will make you money, and a minor that you enjoy. I never became a music performance/fine arts major, but I still like music and playing instruments. You can always keep up with your passions on the side if they don’t make sense for your college degree.
Happiness isn’t a paycheck, but a paycheck helps
Now let’s look at the infographic’s last section – happiness. I’ll be the first to admit that money by itself doesn’t equate to happiness. But money is essential for modern life – how happy would you be if you couldn’t afford basic food, clothing, shelter, and transportation? Research has shown that a $40,000 salary serves as a baseline to adequately provide these needs along with a sense of security. Obviously, this varies by region and other factors. A college degree doesn’t guarantee a job, or a $40,000 salary. But it makes it easier to land a job and earn a higher salary.
What are your thoughts on the value of a college degree?