Will that college degree pay off? Some actual numbers

It is 10 years after matriculation, no? Which is around 5-6 years after graduation.

The salary data presumably also includes students who drop out and do not graduate.

Administrative earnings records are used to estimate inter alia the following measures of student labor market success for cohorts of federally-aided students beginning their studies in various years:

  1. Mean and median earnings among workers (i.e., among those with positive yearly earnings) 6 to 10 years after first enrolling in an institution.

Earnings are defined as the sum of wages and deferred compensation from all non-duplicate W-2 forms received for each individual (from both full- and part-time employment), plus positive self-employment earnings from Schedule SE. Data are available for each year starting six years after a student enrolls in college, up to 10 years after the student enrolls; enrollment dates are estimated based on FAFSA self-reporting, as with the completion rate cohort construction described above.

Yes, choice of major can be one factor in an analysis of whether a college will pay off. However, liberal arts majors at top (T20) colleges have much better payoffs than liberal arts majors at other colleges. Harvard graduates in History or English average $45,000 starting salaries after completing according to College Scorecard data. Also, I didn’t see whether this simplistic analysis accounts for students that go onto high paying professional schools (MBA, Law, or Medical School) after majoring in liberal arts at the bachelor’s level.


Whatever major/degree combination you select, don’t choose this one:

That USC program is a social work master’s program… there is plenty of unmet social work need in the US, but no one wants to pay for it. So social work problems go neglected until they eventually become police problems.


Here’s the problem - we are letting a bunch of business types decide on the value of education, based purely on their determination of the financial return on education.

First, as others have written - there is no real way to translate education to dollar amounts.

Second, this analysis looks at tuition and salaries as though they were “natural phenomena” which we, as a society, are unable to change. Therefore all of their solutions depend 100% on offering or not offering majors, based on the salaries of the graduates.

Third, the entire article treats all majors as though they were the same in regards to the skills and education that an applicant needs. Yes, a CS major makes a lot more than a History major. However, only a small number of students have the math talents required to study CS.

It’s not “STEM majors make more, so all students should major in STEM fields”. It is actually “All students who are not talented in a STEM field should not get a college degree, unless they are wealthy”.

Finally, just because CS or Data Science are now “hot”, that these are the fields that will be hot forever and ever. In another four years, technology may change enough that all the skills that are being taught in these fields will no longer be relevant. Unless somebody envisions universities as all being taught by contingent faculty who are hired and fired at will as the requirements change, they will always be playing catch up.

Of course, for some administrators and politicians, a university made up of highly paid administrators and low paid, powerless, contingent faculty is a dream come true.

However, no highly talented individual will be willing to go through even basic grad school for this “career”, and the “professors” will mostly be the college graduates who have no other job prospects - EXACTLY the sort of people that we want in charge of education.

Circling back to my second point, the big problem, which is being ignored, is that salaries have been stagnant for decades, and that tuition is going up.

We should stop increasing the size of the economy at the expense of the lower and middle class*, and we should increase financial support for public higher education. Then let us look at which college degrees are “profitable”.

‘*’ Productivity and the economy have been growing for decades, while most salaries have been stagnant. The profits from that growth and the increasing hard work of the workers have mostly gone to increase the capital gains of the already wealthy (and multimillion dollar bonuses for the top corporate positions).


I think it’s fine to train people to work in areas where there’re unmet needs. However, we seem to over invest in both time and money in most of these areas, driving the cost in the process to the detriment of many (and for the benefit of a few). Why someone needs a master’s degree (or even a bechelor’s degree) to do social work, for example?


Every CS major does not make “a lot more” than every history major. And there are a LOT of low end CS degrees right now where the students graduate into jobs which they could have gotten after a 15 week coding academy. Cal Tech does not represent the typical CS program in the US right now, heavy on conceptual, mathematically rigorous thinking. I could introduce you to a bunch of kids working in transaction-intensive roles at insurance companies, credit card companies, banks who work in what the rest of us understand as IT. There are bad CS programs which accept kids with average math skills and guess what- a history major who gets a job in business development or marketing will be managing those tech support “computer scientists” in five years. AND out-earning them. These are the employees management calls when their excel goes wonky. Not exactly Cal Tech level work…

CC is really in love with STEM. STEM produces kids who are underemployed just like any other discipline.


STEM does produce proportionally more students who have the knowledge and skills that make them more immediately employable, than, say, students in humanities. However, unless they continue to update their knowledge and improve their skills, they may not advance very far in their careers in a world that changes constantly and unpredictably. They’ll also need to adapt, and to reinvent, as those successful students in humanities have to do on day one. A college education imparts knowledge, but its most valuable lesson a student can learn is how to think rigorously about each subject, whether in STEM, humanities or social sciences, and relate it to the world around her/him.


When you read the article, the egregious part of this is USC is using a for profit entity to market this online program (at one point taking a 60% fee cut) to the neediest student group. Of course the taxpayers are ultimately the ones on the hook for for any federal loans. Excerpts because the article is behind a paywall:

"The nonprofit school used its status-symbol image to attract students across the country, including low-income minority students it targeted for recruitment, often with aggressive tactics. Most students piled on debt to afford the tuition, which last year reached $115,000 for the two-year degree. The majority never set foot on the posh Los Angeles campus but paid the same rate for online classes as in-person students…

Recent USC social-work graduates who took out federal loans borrowed a median $112,000. Half of them were earning $52,000 or less annually two years later… At California State University, Long Beach in Los Angeles County, graduates borrowed less than a third of USC students and earned a median $59,000 two years later—about 14% more than USC students…

The social-work school was contractually required to share about 60% of revenue with 2U and ran into financial trouble, according to people familiar with the agreement…

A 2U spokeswoman said the company has been given “specific guidance” by USC that applicants with GPAs as low as 2.5 could still be considered. USC declined to explain the discrepancy…

USC graduates do a slightly worse job passing a national licensing exam than other California test-takers: 69% of USC graduates passed earlier this year versus 70% statewide. At the nearby University of California, Los Angeles, 93% passed…"

Sounds like USC has taken a page out of the business model of many for-profits that takes advantage of needy students and exploits federal loan programs.


It’s predatory behavior and, in my view, really despicable.


If someone is paying for it themselves, I really don’t care what college costs. If taxpayers are on the hook for it through subsidized student loans, then I care both about the amount and the loan repayment record.

Personally, I think that before loans are disbursed, students and their parents should see and sign a statement that says.

Average salary from your college and college/major: $X, $Y
Projected student loan payment: $X for Y years
Student default rate for your college and college/major: %X, %Y

And if it turns out that certain colleges/majors have a particularly bad record of repayment, we should cut them off from subsidized student loans.

Yes, but this is true for a couple of major reasons. First, the cost of benefits, particularly health care, has been increasing significantly, and therefore total compensation, which is the actual cost to the company, is higher even though salaries may not be. Second, there are many more required administrative positions than before, such as the dietician for kids with allergies, the diversity officer, and the mental health workers to take care of the stressed out kids.


For reference, the CollegeScorecard reported early career median earnings for English majors by college type is below:

English Major: Ivy League = $36k, Other T20* = $34k, All Colleges = $27k

How do you know that attending a T20 college is the main reason for the $7k higher median starting salary ($34k vs $27k), rather than individual student characteristics? For example, suppose you are comparing Harvard to UMass. UMass students have a median ~1300 SAT score and came from families with median ~$100k income at time of NYT/Chetty study. Suppose you only looked at non-ALDC hooked Harvard students with the same ~1300 SAT and $100k income as the UMass kids. Do you think they’d average the same starting salaries as the mostly higher score + wealthier Harvard full class? What if you only looked at high achieving UMass kids who had SAT scores and family income/connections as high as the typical Harvard kid? Do you think they’d have a higher median starting salary than the UMass overall average?


Data, I thought the database was ONLY comprised of kids getting federal aid… so the high income families are not in the numbers AT ALL.

What am I missing?

The non-ALDC hooked ~1300 SAT student is unlikely to get admitted to Harvard. Clearly, Harvard students come from wealthier families than UMass students and they are more likely to make financially beneficial connections while attending Harvard or afterwards.

That is a good point about CollegeScorecard using the federal database, which is primarily composed of kids receiving federal FA. This database does include a good number of families with 6-figure incomes, which relates to how they publish cost of attendance for >$110k income families in the federal database. I expect the average income among federal database kids is significantly different between UMass and Harvard, but I agree that the CollegeScorecard database should eliminate the bulk of Harvard’s high income kids, and control for income to some extent.

In any case, the basic point of my post still applies that if you assume that major + name of college determines salary, and individual student characteristics have no influence on salary, then your resulting conclusions will have little meaning. These individual student characteristics that may influence salary include things like differences in ability, career goals, personality, demographics, and family characteristics. Students attending Harvard tend to be far more high achieving and talented than the overall US average. They also are more likely to come from financially + career + college supportive families, and more likely to be targeting certain fields associated with a higher salary upon entering college. All of this influences average starting salary.

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Yes, there limited overlap between in SAT scores and other stats of UMass kids and Harvard kids. You are essentially comparing 2 different groups. A more reasonably comparison might be looking in the range for which there is overlap. For example, based on the score distribution, I’d estimate than 5-10% of kids at UMass have a 1500+ SAT. If you only look that at these 5-10% UMass kids with have Harvard-level scores, top grades, take honors classes, … and are also English majors. I expect their median income will be far more similar to Harvard English majors, perhaps not significantly different.

Studies that have controlled for these factors consistently find far smaller differences in income between colleges. For example, one study that did attempt to control for these confounding factors was the classic Dale & Krueger ones, which have over 1000 citations. They controlled for external factors by comparing students who applied to and were admitted to a similar set of colleges, and compared outcomes for ones that attended the more selective vs ones that attended the less selective. They concluded that there was not a statistically significant difference in average earnings between students who attended the more selective and less selective college. There was a statistically significant increase in earnings associated with being a high stat student, and there was a statistically significantly increase in earnings associated with being the type of student who applies to a highly selective college, but no benefit in earnings for attending aside for a few special subgroups (mostly first gen + URMs who may lack certain family characteristics, including the connections you mention).


I am a recent MSW (2019) and I take great issue with this question. I learned a great deal from my studies, much more than I thought I would, lol, and it led me to a successful late-life career change.

Are social workers grossly underpaid? FOR SURE!


And after years of counseling “soon to launch” (or in many cases- won’t launch) recent college grads, a willingness to relocate for not just that first job, but for a few after that, has a meaningful impact on compensation and career trajectory. I don’t know how you measure that- I leave this to the data folks here. But a kid who graduates with a degree in Art History (whether from U Mass, Harvard, or Stonehill) needs to understand that the first job might be with a historical society in Columbus Ohio, or a museum in Fort Worth, Texas (a world class institution by the way).

I want to pull my hair out sometimes- that 22 year old kids cannot, do not, will not see that the first rung on the ladder- regardless of major- is often NOT next door to where the GF or BF are going to land. The parental teeth grinding- kid is magna cum laude, unemployed, there are no jobs. There are jobs- but not necessarily where the kid intends to live. Such a disconnect.

I’d love to see an analysis which shows the impact of geographic mobility- especially in the first few years- on long term compensation. I come from a family of immigrants so I realize my perspective is skewed-- but whether you’re studying CS or ethno-musicology or sports management- you need to be willing to consider relocating.

Rant over.


I would be interested in seeing this too, but also wonder if going forward far fewer grads will need to relocate for their jobs (at least the ones that can be done remotely, which is a higher number than many of us thought pre-pandemic).


This is something I’ve always emphasized as a reality of academia to undergrads considering PhD programs. If you get an offer, you take it – rarely do you have the luxury of being picky about location, at least unless you’re pretty advanced in your career.

I’ve taught at three different universities in the last four years and moved from one end of the country to the other. It’s not uncommon for people to bounce around the country doing 3+ postdocs and lectureships before securing a permanent position somewhere.