By Jeph Ajobaju, Chief Copy Editor
A degree remains valid in any society for a good paying job, the reason many go to the university in Germany and Scandinavia where university education is free, and in other countries where it costs students a lot of money.
Whether university education is free or paid for, a student needs to a course carefully to ensure employability if the aim is to get a job after college in any country, particularly in the United States which attracts students from all over the world.
Per CNBC, college can be an expensive investment – and the stress of choosing a school, compounded by escalating costs and the pandemic, can feel debilitating.
A college degree is still one of the best ways to increase earning potential. College graduates on average earn 80 per cent more than those with just a high school diploma.
Nearly two-thirds (65 per cent) of bachelor degree programs also enable graduates to recoup the cost of their diploma in 10 years or less, according to a new report from public policy group Third Way, published by CNBC.
Certain majors, however, may bring a faster return on investment than others, the report found.
Michael Itzkowitz, the report’s author and a senior fellow for higher education at Third Way, analyzed data collected by the U.S. Department of Education from about 2.2 million students who graduated in 2015 and 2016, then measured their earnings two years later.
Eleven bachelor’s degree programmes best for recouping cost
There are 11 bachelor’s degree programs that allow most graduates to recoup the money spent on their diploma in five years or less, the report notes. Seven engineering majors dominate the list, including petroleum, aerospace and industrial engineering.
The remaining majors are also in science, math and health care: nursing, dental support services, construction management and quality control/safety technicians.
Other fields, such as drama and dance, showed no return on investment most of the time, the report found. That doesn’t mean those careers don’t offer creative fulfillment or societal value, Itzkowitz tells CNBC Make It, but it could indicate “unstable employment or limited economic return.”
He calculated the earnings premium of college graduates by comparing the average salary of those who attended college to a high school graduate, then measuring that number against the average net cost a graduate paid toward their degree (an amount that can include tuition, housing and books/supplies costs).
For example: if a student graduates with a bachelor’s degree in business and earns $15,000 more than a high school graduate in their field, and their degree cost $60,000, it would take four years to recoup the cost.
Itzkowitz adds that he wasn’t surprised by the report’s findings as workers in STEM and healthcare have historically been “high in demand. They tend to have the strongest job prospects, so they can start earning a lot of money right after graduating,” he says.
The Covid-19 pandemic led many prospective students to delay or reconsider their college plans altogether, largely due to financial concerns.
Even as campuses throughout the US re-open for the fall semester, cost remains a top concern. According to a recent report by Fidelity Investments, 4 out of 10 students rank cost as the “most important” factor in choosing a school.
There’s also a clear gap between the tuition payoff for public, private and for-profit school graduates.
Public vs private schools
Itzkowitz found that public institutions offered the best prospects for a graduate to quickly recover their education costs: 73 per cent of public programs saw graduates recouping their investment within 10 years, compared with 56 per cent of private, non-profit programs and 40 per cent of for-profit programs.
As public schools are almost always less expensive than private and for-profit schools, Itzkowitz explains, public school graduates tend to recoup their investments at a quicker pace – especially if they chose a major with a high earnings premium.
Jeff Levy, an independent educational consultant in Santa Monica, warns students not to pick a major solely because of its potential salary. “There’s no way of knowing, with 100 per cent certainty, which professions will pay the best in 5, 10 years,” he says.
The better way to shop for a college, Levy recommends, is to look at schools that will be the most generous given your financial profile.
For example: if you’re a family with clear financial need, prioritize colleges that distribute a lot of need-based aid to get the biggest financial package. If you have little to no financial need, he says, prioritize schools that are generous with merit-based aid.
But the number one tip Levy shares with all of his students is to find a vocation they’re passionate about and apply to the schools that have respected programs in that field.
“The best guarantee of future success is deeply engaging in what you love,” he says. “Not being in the bottom third of your accounting or engineering class because you think it will make you more money down the road.”