Picture this: You've donned the cap and gown, walked across the stage, and proudly accepted your college diploma. The exhilaration of completing your degree is palpable, and the world seems full of possibilities. But as you start your professional journey, reality sets in. Years later, you find yourself still burdened by the weight of student loans, struggling to make ends meet and questioning whether your degree was truly worth it.
There is an important aspect of higher education that people are beginning to realize could have a huge impact on life after college: return on investment (ROI). You may be familiar with ROI in business contexts, but what does it mean when applied to education? Simply put, ROI in education measures the financial benefits gained from obtaining a college degree relative to the cost of obtaining that degree. It's an important factor to consider when choosing a degree program because it determines the long-term financial impact of your educational investment.
Some college degrees cost more than the financial benefits they provide. The goal here is to make smarter educational decisions by equipping you with the knowledge and insights necessary to understand the potential ROI of different degree programs.
Let’s explore the true value of some college degrees and empower you to make informed choices that set you up for success both academically and financially. Let's ensure that your college degree becomes a steppingstone to a brighter future, not a financial burden that follows you for years to come.
Degrees With High Costs and Low Financial Returns
When considering the return on investment (ROI) for college degrees, it's important to be aware of certain degrees that may come with high costs but offer lower financial returns. Here are some degrees to consider if the ROI is worth it.
It’s also important to note that some career choices stem out of personal passions and the pleasure derived from a certain type of work might be more important than the potential financial gains (or losses). If you can, always pursue a career that you will find the most fulfilling but if finances are a consideration, an informed decision is always best.
Majors that Pay the Least
- Liberal Arts (General Studies): Typically, these programs may lead to lower average starting salaries. Common career paths in this field often don't require specialized knowledge, which can impact the potential for high earning potential.
- Film, Media, and Fine Arts: Specialized arts programs often come with high tuition costs. However, job opportunities in these fields can be limited and highly competitive, which may make it challenging to recoup the initial investment.
- Culinary Arts: Pursuing a culinary arts degree can come at a cost. However, entry-level salaries in the culinary industry are usually low despite the significant training costs, which can affect the financial return on investment.
- Psychology (Undergraduate Only): While psychology can be an interesting field of study, it's important to note that high upfront costs may not translate into significant financial returns unless advanced degrees and certifications are pursued. With a bachelor's degree alone, career prospects can be limited.
- Education: Tuition costs for education programs can often outweigh the modest teacher salary scales. Long-term financial payoff in this field usually requires years of service or further certification.
Consider these factors when making educational decisions. By understanding the potential financial returns for different degree programs, you can make informed choices that align with your academic and financial goals. Education is a significant investment, and it's essential to choose a degree program that sets you up for success both academically and financially.
Degrees by the Numbers
Let's take a closer look at degrees with low financial returns and compare those with more lucrative choices. Data and statistics clearly demonstrate the impact of tuition costs which average nearly $40,000/year, to the potential return on investment for certain degree programs. For instance, let's compare the average starting income for some degrees:
| Degree Program | Average Starting Salary |
|---|---|
| Liberal Arts | $38,000 |
| Fine Arts | $40,000 |
| Psychology (Undergrad) | $40,000 |
| Elementary Education | $40,000 |
| Mechanical Engineering | $72,000 |
| Nursing | $62,000 |
| Business Analytics | $64,000 |
As you can see, some degree programs, like art school, pay only about 60% when starting out when compared to other fields. Keep in mind, this data provides a general overview, and individual experiences may vary based on various factors such as location, industry demand, and personal skills.
Evaluating ROI Before Choosing a Degree
When it comes to pursuing a college degree, consider the return on investment (ROI) in terms of financial outcomes as well as career prospects. Some positions that might pay well may not be easy to find or obtain. Not all degrees provide the same financial payoff, so it's essential to assess the potential benefits and costs before making a decision. Here are some key points to consider:
Research Career Outcomes:
Look up job demand, salaries, and availability in your field of interest. Use tools like the Bureau of Labor Statistics Occupational Outlook Handbook to gain insights into the current and projected job market trends.
Consider the growth potential and earning prospects associated with different career paths. This information can help you evaluate the financial returns of pursuing a particular degree.
Consider Alternatives:
Explore lower-cost options, such as community college or certifications, that can provide relevant skills and credentials at a fraction of the cost.
Investigate the possibility of starting at a local school and then transferring to a four-year institution to save money while still achieving your educational goals.
Plan for the Long-Term:
Take a holistic view of your career aspirations. Think beyond immediate earning potential and consider factors like networking opportunities, job satisfaction, and long-term growth potential.
If your passion lies in a field with a lower ROI, consider complementing it with a higher-demand skill set or a minor that can enhance your job prospects and increase your earning potential.
Evaluating the ROI of a college degree requires careful consideration of various factors. Weigh the cost of education against the potential career benefits it will bring you. Think critically and make an informed decision that aligns with your goals, interests, and financial aspirations.