Obtaining a college diploma has long been viewed as a ticket to a good job, but new data suggests that the type of degree you get also can have a huge influence on your annual earnings.
College graduates between 25- and 64-years-old enjoyed median incomes of $74,154 last year, according to recent data from the U.S. Census Bureau. By comparison, workers over 25 with only a high school degree had median income of $44,400 a year, according to the Bureau of Labor Statistics.
Yet the Census data suggests that some college grads are earning only slightly more than people without bachelors degrees, a potential issue given that the spiraling cost of higher education has pushed student debt to $1.8 trillion and saddled millions of Americans with loans that will take years to pay off. College students — and their parents — increasingly want the security of knowing that their investment in a pricey degree will pay off down the road.
“Science and engineering majors as well as business majors tend to make more money than the humanities, especially in the arts fields,” noted Adam Nguyen, the founder of Ivy Link, a consulting firm that advises students on college applications. “That is the big picture, but as you peel away the various layers some of the studies will point out that the college you go to also matter.”
While the Census data doesn’t examine earnings by specific college, earlier research has indicated that attending an elite university, such as an Ivy League institution such as Harvard or Yale, is also linked to higher earnings — another reason why parents are often eager to push their kids to apply to prestigious schools.
A recent study by Opportunity Insights, a group of economists at Harvard University who study inequality, found that an elite education can be significant in a student’s career trajectory after college. By looking at applicants who were put on the waitlist for Ivy League and other highly regarded schools and then comparing those who were ultimately admitted versus students who were rejected, the group found that those who got in were 60% more likely to have incomes ranking in the top 1%.
Americans with college degrees who earned the highest median salaries last year studied engineering, according to the Census analysis. To be sure, earning a degree in a given field doesn’t necessarily mean that a person’s career will unfold in that area, but it indicates that they have the training to pursue work in that industry.
People with engineering degrees last year earned median income of more than $106,000, the Census found.
The lowest-paying major is visual and performing arts, where the median income of people with these degrees was just under $55,000 — or almost half as much as what engineering majors earn.
While that’s about $11,000 higher than the median annual income of workers with high school degrees, the question is whether the investment in a visual or performing arts degree would pay off over time, given the expense of a college education. Roughlya third of Americans expressed confidence in the value of higher education, down from more than half in 2015, according to a Gallup poll earlier this year.
“People are looking at the price tag of college, and it’s looking like an enormous expense, but I think the bigger thing is the uncertainty of the payoff,” New York Times reporter Paul Tough, who covers inequality in education, told CBS News. “On the whole, a college degree is still a valuable thing in the labor market but there’s a lot more variability — for some people it’s paying off big, for others it’s leading to real financial ruin.”
More students are veering into higher-paying fields such as engineering and statistics for that reason, experts say. Meanwhile, enrollment in liberal arts degrees such as English and education have fallen sharply in recent years.