Speaking of Student Debt

[eytonxav]

Not comprehensive to include my field, linguistics. (Salaries are probably quite low.)

Maybe a subsection under English

 

[Independent]

Here is a comprehensive list of salaries by major both starting and mid career:

BEST UNDERGRAD COLLEGE DEGREES BY SALARY, 2010-2011 | Department of Economics

Good info, but a few caveats:

One of the big issues regarding major choice is whether the grads get any job at all (and also any that uses their degree). The source for this data is payscale.com which says "Full-Time Employees Only: Only graduates who are employed full-time and paid with either an hourly wage or an annual salary are included."

Also note their definition of "Starting Employees":

These are full-time employees with 5 years of experience or less in their career or field who hold a bachelor's degree and no higher degrees.

For the graduates in this data set, the typical (median) starting employee is 25 years old and has 2 years of experience.

I'm also thinking this isn't the type of carefully randomized sample that pollsters or the US census would use. It's just people who happen to use this website.

That said, this is still useful data. Their "Top Ten Job Titles for English Majors" include Admin assistant and Customer service rep.

What I really want, of course, is jobs by school-major combination. Do English Lit grads from school A do a lot better than English Lit grads from school B? It seems that PayScale would have that level of detail, but their database may be too small to make it accurate.

 

[Independent]

I agree all students should see these numbers. but, does it really influence a young adult? for instance, if they are majoring in music, they most likely see some successful musician as their path opposed to a music teacher making $40k. It is most likely tough to "crush" a young adult's "dreams," but i suspect very few are passionate enough about their "dreams" to be scraping by day to day.

I'm sure it won't influence everybody. Some will intentionally shut their eyes. Many will assume "I'll beat the odds".

But, I still think that many will use it (and many parents will). In some cases it may not change a major but simply change spending habits in college, that's still a plus.

I would really like to see the starting jobs/salaries by school. I think students/parents try to decide whether the more expensive school is worth the extra money. What if the starting salaries are the same? What if they are a lot different, but the school with the better job results won't accept me? Does that serve as a wake-up call?

I'd even like to see each school list median GPA by major. That gives the student some feeling for whether he/she is likely to end up in the upper/lower end of the salary range.

 

[2B]

ChemE's currently won't get hired for petroleum engineer jobs and this has been true for the last 3 years. At least for my major oil company and I know of a few others that won't hire any other type of engineer for petro eng jobs. When they were getting hired in the "boom" time, they were intially paid 5 to 10% less than a pet eng. This is just based on being a pet eng. recruiter for a major oil company. ymmv.

Things have been somewhat slow in the industry since 2008. Things are picking up so your company's approach may change. Paying ChE's less to start isn't unusual but I suspect any wage difference will disappear with a couple of years' performance evaluations. In my hiring days some schools would get a premium as a new grad but that disappeared after a couple of years of performance reviews.

I disagree with this as well. for one, after 6 years, I am at 172% of my starting salary. I may have hit the peak, but I have recently put the feelers out for what I could get if I switch to another company, and just switching would put me well over 200%. I also know many "techno-weenies" who make more than their supervisor.

I meant as a percentage of the current starting salary. I'm well over 1000% of my original starting salary. Of course, I think the Periodic Table was still only half done when I graduated. In my group leader days I had senior technical engineers making more than I was as a young supervisor. Division managers the same age as the senior technical personnel are much more highly paid.

FWIW, you may peak with a company for performance reasons but the bulk salaries of ChE's peaks about age 50 unless you are in the rising senior manager ranks. Last year wasn't that good for the graduating class but it seems to have picked up significantly this year. There's also more interest being shown in hiring experience engineers.

 

[2B]

What I really want, of course, is jobs by school-major combination. Do English Lit grads from school A do a lot better than English Lit grads from school B? It seems that PayScale would have that level of detail, but their database may be too small to make it accurate.

There are studies on this. The "big picture" studies consistently show that the Ivy League schools outperform their liberal arts counterparts from the less prestigeous schools. More detailed studies show that equally qualified high school students that do not go to Ivy League schools (with their highly selective admissions standards) perform nearly the same in post graduation pay.

 

[eytonxav]

Do English Lit grads from school A do a lot better than English Lit grads from school B? It seems that PayScale would have that level of detail, but their database may be too small to make it accurate.

I suspect that for English majors the diversity of jobs can be pretty broad and it would be hard to compare how one grad does from one school compared to one from another school. For example, some grads may go on to become: teachers, professors, editors, journalists, web masters, technical writers, linguists, authors, playwrites, communication specialists, speechwriters, script writers, or even on to law school. So unless you drill down to like jobs, the data could be misleading

May be there are studies out there that would show what you are looking for, but that goes well beyond my curiosity to search for them

 

[Independent]

There are studies on this. The "big picture" studies consistently show that the Ivy League schools outperform their liberal arts counterparts from the less prestigeous schools.

More detailed studies show that equally qualified high school students that do not go to Ivy League schools (with their highly selective admissions standards) perform nearly the same in post graduation pay.

The second sentence is more interesting to me than the first. The only paper I know of along those lines is this one http://www.international.ucla.edu/cms/files/w7322.pdf
It's very narrowly focused. I would like to see many researchers doing studies that try to control for the quality of the students starting, but focusing on less selective schools. Do you know of any others?

Re the first sentence, yes, that's true if you look at all grads. I'd like to see the detail for various majors and for all schools.

 

[Katsmeow]

I would really like to see the starting jobs/salaries by school. I think students/parents try to decide whether the more expensive school is worth the extra money. What if the starting salaries are the same? What if they are a lot different, but the school with the better job results won't accept me? Does that serve as a wake-up call?

A few thoughts. As I recall the research shows that yes people who go to very selective name schools make more money than people who go to the local state university. However, not every student can get into the selective name schools. When you look at students who were accepted to the name school and then went to a non-name school my understanding is that long term earnings are basically the same. It's the student...not the school.

As far as wake up calls for kids. Let's take my son. He is 17 and just finished his first year of community college, starting with no idea what he wanted to major in. He has considered a lot of things -- engineering, psychology, criminal justice, computer science, and to my surprise -- English.

He is actually extremely good at math and science so intellectually could study engineering or a science and end up with one of the higher paying degrees.

But...he is interested in English. He isn't really interested in engineering or science. I've mentioned the likely pay range for English. But, here's the thing. He thinks that ending up earning, say, $50,000 a year sounds fine to him. He isn't very money oriented, but is happiness oriented.

However, he does understand that it would be foolhardy to go into great student loan debt for such a degree so I expect he will be going to a state university after community college.

 

[GregLee]

However, he does understand that it would be foolhardy to go into great student loan debt for such a degree so I expect he will be going to a state university after community college.

I'm not so sure that it really is foolhardy to incur lots of student loan debt. That seems to be the sense of most contributers to this thread, but that doesn't make it true. My loan debt for my undergraduate degree was only a year's salary, when I finally started paying it off after completing grad school. And I would have been happy to pay off a debt that was three or four times as much. Compared to, say, a home mortgage, a student loan seems to me like a really, really good investment.

 

[Nords]

May be there are studies out there that would show what you are looking for, but that goes well beyond my curiosity to search for them

They're not exactly peer-reviewed analyses, but Business Week has done some studies:
College ROI: What We Found - BusinessWeek

College: Big Investment, Paltry Return - BusinessWeek

College's Holy Grail: Low Cost, High Returns - BusinessWeek

 

[studbucket]

Perhaps I'm a bit crazy and lack perspective (I am only 25), but from my PoV, if one would attend an in-state public university, the amount of student loans *shouldn't* exceed $40k right now, correct?

There are easy-to-get "fall off a log and hit water" $500-$1000 scholarships students can get for just applying or working with their department administrators and once a student is out of the dorms, all living expenses should be covered by a 15-20 hr/week job. So, if there's 1 year of tuition+dorms, then 3 more years of tuition. For an in-state student, that would currently probably be about $30,000 in loans.

At this point, many grad schools will also offer great TA/RAships and scholarships to those who are admitted, if you look around. I know that I made money off of grad school, and it wasn't because I was exceptional.

Of course, it gets even cheaper if one would follow the community college->public university route.

I guess what needs to happen is some better expectation setting and financial advice from parents, schools, and guidance counselors. My wife and I were fortunate to know what we did when we went to college, and we both know that college is what you make of it. In general, just going to the classes and getting the grades doesn't do much. Taking advantage of student orgs, events, job fairs, and the connections you can make are what help you after college.

 

[eytonxav]

One other aspect of going to a top school that should not be overlooked is the advantages that an alumni network can provide. There are many leaders out in marketplace that place a high value on taking care of their own. Not that this isn't true for state schools as well, but if you went to a top state school or Ivy league, it may provide you with more offers and higher $ opportunities.

 

[Texas Proud]

A few thoughts. As I recall the research shows that yes people who go to very selective name schools make more money than people who go to the local state university. However, not every student can get into the selective name schools. When you look at students who were accepted to the name school and then went to a non-name school my understanding is that long term earnings are basically the same. It's the student...not the school.

As far as wake up calls for kids. Let's take my son. He is 17 and just finished his first year of community college, starting with no idea what he wanted to major in. He has considered a lot of things -- engineering, psychology, criminal justice, computer science, and to my surprise -- English.

He is actually extremely good at math and science so intellectually could study engineering or a science and end up with one of the higher paying degrees.

But...he is interested in English. He isn't really interested in engineering or science. I've mentioned the likely pay range for English. But, here's the thing. He thinks that ending up earning, say, $50,000 a year sounds fine to him. He isn't very money oriented, but is happiness oriented.

However, he does understand that it would be foolhardy to go into great student loan debt for such a degree so I expect he will be going to a state university after community college.

Not saying your son is one of these.... but I have noticed that kids that are in high school or college do not really understand money as much... IOW, $50,000 and $75,000 might sound the same because it is a lot more than they have ever dealt with.... but a 50% increase in salary is a big deal...


I remember back when I was in my first year of college... and dropped out... I was working in a mail room making $600 a month... it paid for everything that I needed.... I was happy... then I met a girl that had a child and did calculations and determined that I could not support a family... went back to school the next year...

 

[Texas Proud]

I'm not so sure that it really is foolhardy to incur lots of student loan debt. That seems to be the sense of most contributers to this thread, but that doesn't make it true. My loan debt for my undergraduate degree was only a year's salary, when I finally started paying it off after completing grad school. And I would have been happy to pay off a debt that was three or four times as much. Compared to, say, a home mortgage, a student loan seems to me like a really, really good investment.

I guess the issue is the definition of 'lots of student loan debt'....

To me, that means way to much debt for the job that you can get to support the debt... so by my definition, you did not incur lots of debt... nor would you have if it was 3 or 4 times as much...

But someone who has $200K of debt and a job that pays $36K.... has lots of debt...

 

[Independent]

They're not exactly peer-reviewed analyses, but Business Week has done some studies:
College ROI: What We Found - BusinessWeek

College: Big Investment, Paltry Return - BusinessWeek

College's Holy Grail: Low Cost, High Returns - BusinessWeek

I wish there were some "peer reviewed" studies where the peers did good work. Unfortunately, this is better than average quality, but it's not very good.

This ranks schools, but doesn't adjust for majors. So Harvey Mudd and Caltech provide the best returns, while the School of Visual Arts in NYC and the School of the Art Institute of Chicago provide some of the worst.

I expect if we could go through the list and adjust for majors, we'd find that much of the supposed advantage of one school over another is simply the differing mix of majors. I don't know how this helps me choose a school if I'm going to major in accounting or nursing or architectural preservation etc.

There is no attempt to adjust for quality of students going in. So if I've been accepted by Harvard, should I spend the extra $120k for Harvard instead of U Mass because the average Harvard grad earns $1 million more? Or should I believe the Krueger study that says if I'm sufficiently talented to get accepted to Harvard, I have just as good a chance of a high income if I go to a "lesser" school?

(On the plus side, I think it's good that they adjust for both graduation percents and graduation speed to get more realistic numbers. I'm not sure about adjusting for financial aid.)

 

[Retch The Grate]

I wish there were some "peer reviewed" studies where the peers did good work. Unfortunately, this is better than average quality, but it's not very good.

This ranks schools, but doesn't adjust for majors. So Harvey Mudd and Caltech provide the best returns, while the School of Visual Arts in NYC and the School of the Art Institute of Chicago provide some of the worst.

I expect if we could go through the list and adjust for majors, we'd find that much of the supposed advantage of one school over another is simply the differing mix of majors. I don't know how this helps me choose a school if I'm going to major in accounting or nursing or architectural preservation etc.

Yup, I've got a bunch of friends who went to Harvey Mudd and they are all whip smart and make lots of money, but that's because they are engineers and mathematicians. My Oberlin cohorts fare far less well on the chart, but if you want to be a world class performing artist it is one of the best places on the planet to go...

So depending on exactly what sort of ROI you want... I'm happy with my BA (yes A) in Computer Science from Oberlin College. I got to be the person I am in part due to the school I went to, but my major set me up for a relatively well paying career (though my choice to make games as a designer has certainly dramatically lowered what I could have made in pure dollars) that I love (hence my interest in the FI part of FIRE more than the RE).