Some things are worth investing in. But that doesn’t make them cheap.
There’s broad evidence that a college education pays off, since college grads on average earn at least twice as much as mere high school grads. But it can also be a struggle to come up with the funds to pay for college, with the typical cost of a bachelor’s degree hitting $102,000, according to the nonprofit Hamilton Project. The price tag for a top private-school education can easily be twice as much.
New research by Hamilton, along with a separate report by Payscale, can help families figure out how to optimize education spending and make sure the investment turns out to be worth it. Both reports rank college majors according to the income earned by people who chose each field of study. Some of the findings aren’t surprising: Quantitative fields emphasizing math and science produce the highest earners, for instance, while people interested in social work, education and the arts clearly aren’t in it for the money.
But a detailed assessment of pay levels by major also produces a few surprising insights about how to best spend your education dollars. Here are 5 key takeaways:
Finance majors don’t earn the most. Wall Street financiers certainly make themselves seem like the richest people in the world, but maybe that’s just because they’re so showy. Finance is only the 15th highest-paying major in the Hamilton Foundation study and 33rd in the Payscale data. Engineering majors grab most of the top spots in both reports. Petroleum engineering tops the Payscale rankings, with mid-career median annual pay of $176,300. The Hamilton Project, which ranks majors differently, puts chemical engineering on top, with median lifetime earnings of $2.1 million. Also ranking higher than finance in one or both reports: computer science, operations and logistics, construction services, physics, math and economics.
Some low-paying majors are well-loved anyway. All 10 of the lowest-paying majors in the Payscale survey — which include child development, social work, pastoral ministry and special education — rank far above average in terms of how meaningful people feel their jobs are. The upshot for people considering such fields may be sure, pursue your passion, but be careful about taking out too much student debt to pay for it.
A few majors seem doubly dissatisfying. Forty-six majors on the Payscale list rank below the median in both pay and meaningfulness. The bottom 10: creative writing, animal science, landscape architecture, German language, graphic design, criminology, broadcast communication, culinary arts, anthropology and healthcare administration.
Not all science pays well. Students may be used to hearing that “STEM” occupations — science, technology, engineering and math — pay the best. But several majors related to science — including multidisciplinary science, biology, animal science, botany and ecology — pay less than the median in one or both studies. Even microbiology, genetics and neuroscience (grouped together as a single field of study in the Hamilton report) rank just one spot ahead of the median for all majors. While some scientists may cash in on breakthroughs at hot companies, many others probably choose less-enriching careers in teaching or research, which explains the lower pay.
Some college grads really lose out. The Hamilton reports shows that, in every major, the bottom 10% of earners make less money than the top 10% of high-school grads who never enter college. That reveals two things. First, some very industrious high-school grads buck the trend and earn a decent living without a college diploma. But there are also some college grads who severely underperform and might even be better off not spending thousands on college. Memo to Junior: Don’t be one of them.
There are many caveats associated with this type of data, and students need to consider other factors besides money when choosing what to study in college. For starters, there’s no rule saying you can only work in the field you majored in, and plenty of people find success by changing fields and applying things learned in one discipline to another.
Soft skills such as grit, charisma and the ability to communicate well can also contribute more to success than anything studied in college. An entrepreneurial mindset is another game-changer, since it can lead to unique opportunities that don’t exist on the corporate ladder. Still, most students will be better off if they know ahead of time what they’re committing to when they choose a field of study. There’s nothing inherently wrong with a low-paying job, unless your debt swamps your income.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.
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