How Your College Choice Affects Your Earning Potential
For the first time ever, the government has published very valuable financial information about college graduates in a new College Scorecard. The scorecard reveals average student debt levels (incurred during their studies) and income (in the first year after they finish college). The data is broken down by program of study and covers more than 36,000 programs at roughly 4,400 colleges.
So, how do schools and their programs stack up?
The good news is that most college graduates earn more in their first year out of school than what they borrowed over the course of their studies. However, the scorecard shows that almost 1 in 6 programs had graduates with debt exceeding their first-year salaries. In some cases, the debt was more than double the graduate’s yearly income.
Typically, students with advanced degrees like doctoral or professional degrees are more likely to have more debt than they earn in their first year out of school. This is not surprising, given that their tuition costs are relatively high and that their first-year salaries for these graduates rarely reflect their long-term earning potential.
The rest of the results are more or less as expected: students from elite or Ivy League schools generally have high salaries, as do students who major in science or engineering. However, this is not true across the board – for example, students in arts programs at Columbia University and University of Southern California, two selective colleges, earned between just $19,700-30,800 in their first year.
That’s according to the Wall Street Journal, which published an overview of the data here. Their article includes a helpful tool that allows readers to compare the median income and debt of programs at different schools. As the newspaper says, the information “could allow students to make more informed decisions about where to go to college, what to study and how much to borrow.”
I encourage students to check out the College Scorecard for themselves, especially if they want to see data from the Ivy League schools – the most prestigious of all colleges in the United States. Although the numbers vary widely, the scorecard is a useful tool that can help students make educated decisions about which school to attend, alongside factors such as a college’s reputation and location.
Now, it’s worth noting that the data has its limitations: it only covers students who received financial aid from the federal government, so it probably only represents a small share of students at fairly elite schools. Additionally, the data only covers programs that had more than 20 students graduate and it excludes students who re-enrolled in college.
Despite the fact that the data isn’t completely comprehensive, the scorecard offers what the Wall Street Journal called “the most granular look yet at the financial health of the nation’s new college graduates.” The question is, what will you do with it?