Colleges That "Pay Off" the Least

College Search & Lists
61

Not just the person, but his/her parents and their financial circumstances and choices matter.

Kid with wealthy parents who will easily pay for any college without any loans needed and provide post graduation support can consider low income career directions (and associated majors). Kid with poor to middle income parents whose most affordable college still needs maximum direct loans has much more money pressure in choice of college, major, and career directions. The second case is likely much more common than the first.

62

Posters are leaving out the fact that this data was collected only for students who received FA and have loans to pay off rather than looking at all alums:

The point of the article is that among those who received loans, the lower salaries may make the level of education investment questionable.

63

However, these forums are full of parent posters with no-FA incomes ($250k+) who complain about not being able to save for kids’ college. Pointing out that they could live like someone with $120k income (still double the national median) and save the rest does not get good reactions. So they may feel that a $40k income for their kid is unthinkable. Or the kid who grew up in a $250k household may have difficulty living on $40k.

64

Right, but a student could graduate from a College That Pays Off Mightily and major in something that just does not and be just as much in debt and low salaried. That’s my quibble with this list.

65

There are no guarantees, it is true. One could major in computer science at Caltech and develop a mental illness which prevents gainful employment. But it is not the norm, and for most of us, the average experience at a specific college may be of interest. So while it is possible to identify other colleges with similar outcomes for some of their students, these particular colleges, all private and expensive, are noteworthy for their outcomes for those who needed aid to attend.

66

Again - the list compared the median income to the average cost.

Just as problematic is the fact that we actually do not know what the the students earning these median salaries actually paid for their education - they graduated 10 years ago. The CoA at Bennington in 2008/2009 for was $7,000-$15,000 cheaper than today. In 2014/2015, it was less than that. In today’s money, they likely paid at least $10,000 less than today.

Looking at Bennington, their average salary is likely more than $10,000 a year higher than their average tuition, not the same, and the average tuition for kids on FA was likely about $10,000 less than today.

So, for Bennington, the data should be: average salary about $45,000, and average cost for these student would have been about $23,000, in today’s money.

Alternatively, they could have compared the medians, so likely the median tuition, 10 years ago, would have been closer to $20,000, in today’s dollars, compared to today’s median salary of $30,000.

Here is another issue - these kids graduated in the middle of a major recession, so they’re likely a few years behind.

So yet another reason why this list is meaningless.

67

I’m hesitant to post in support of the methodology, but unbounded sets such as income are best represented by medians. Sets with defined limits, such as COA, can be measured with usually similar results by medians or averages. In this case, I don’t think comparing a median to a mean, by itself, invalidates the conclusions.

68

If the only students they’re considering are FA recipients it would have made more sense to look at student indebtedness. The average debt upon graduation at Wesleyan is $23,454. Despite the fact that it costs far less to attend the University of New Haven students on average graduate with $48,673 in debt. If U New Haven grads are making a lot more than Wesleyan grads then it makes sense to pay attention to that, but the cost:income ratio is essentially meaningless since it appears Wesleyan offers better financial aid (UNH covers around 62% of need on average, Wes 100%).

69

No question that income is best represented by median, especially since its distribution is so strongly right-skewed. My actual point was more that you cannot compare the median of one set of data to the mean of another set of data. They are two different measures unless the distribution is symmetric.

70

The list says “average cost of attendance”, but I believe they used sticker price of tuition, not average of any kind. I’ll use Wesleyan as an example:

The linked lowest pay off list states Weslayan has “average cost” of $54,614 .

Wesleyan 2018-19 Sticker Price + Fee = $54,614 (https://newsletter.blogs.wesleyan.edu/2018/03/05/tuition-residential-comprehensive-fees-increase-by-4-1-percent/ )

Wesleyan average cost for federal FA recipients = $29,956 (https://collegescorecard.ed.gov/school/?130697-Wesleyan-University)

71

Thinking for a bit about the study using the fed financial aid recipients.

Perhaps it’s to normalize the data. It would remove non school related noise from the review. Higher ses households that are removed from the review may offer social currency and other advantages to the grads that would skew the data and be unrelated to the influence of their educations.

Although I agree it’s more about the majors and personal career dreams of the students that self select these fine liberal arts schools.

72

Many kids who don’t have financial need take out federal loans. I live in a prosperous area and a lot of parents want their children to have a financial investment in their education.

@Sue22 , excellent point in post #67.

73

I don’t think the earnings data is that far off. Raj Chetty the economist at Harvard studied college graduate’s earnings using IRS tax data and found the median income at age 34 for some of the colleges were:

Bennington $19,700
St. John’s College $34,500
Oberlin $38,900
Reed $36,900
Wheaton $46,500
Occidental $49,000
Denison $53,700
Mount Holyoke $48,900
Conn College $55,500
University of the South $46,600

74

I think the list is really interesting as a starting point. Smart consumers will look at the cost of their education vs. it’s value. In fact, most will do this before making the decision. Some don’t care at all.
In fact, among high income earners, the idea that you can study anything you want kiddo is fading fast. As college becomes more para-professional and the best paying jobs are often found in STEM firlds nany parents nudge their kids into jobs that pay. It’s not about $$$. It’s about investment. Since I’m going to pay $350k, I want my kids to have real skills. Liberal arts is great with many solid areas.
Parents know that most kids who graduate will work one day. So the value of their work matters. Picking out a single person doing extraordinary things doesn’t change that ( but to note, many who start foundations are in fact, very well paid).
I’d definitely nix colleges on a list with low returns. I think many college consumers are fairly pragmatic when spending six figures.