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The cost of college, along with recession unemployment numbers, leave parents and college-bound kids with cause for concern. Tuition and fees in 2010 for a private 4-year college are over $26,000 a year, and for a public out-of-state school, over $18,000. And this is at a time when the demand for 4-year degrees has actually declined since 2001. So, does it still make sense for your son or daughter to get that degree?
Advantages: Take heart. A degree still offers advantages. The unemployment rate for college grads is half that of high-school-only grads, and when unemployed, those college grads find work more quickly (it takes them around 18 weeks on average vs. high school grads’ 27.5%). College grads still earn more on average—about $26,000 a year more—but the return on investment can rest greatly on what they study, what they choose to do and yes, even where they go.
‘Geeks’ Rule! The sultans of pay at Payscale.com found this year that engineering is the field that pays for college grads. Several types of engineering, from aerospace to chemical, make the top 5 of their degree list, with grads starting at $93,000 to $64,000 a year and mid-career, closer to $157,000 to $104,000.
Number-crunching (applied mathematics) nets a #6 on the list of best-paying degrees; your teen would start, on average, at an annual salary of around $56,000 and by mid-career make twice that. General math will slide her down the list a bit to #17 but she’s still more likely to make around $46,000 to start and $88,000 later on.
Best Out-of-the-Gate: Some degrees pay high starting salaries but don’t promise as much later on. If your teen is looking for a solid starting income, going tech works. Computer engineering (#9, $61,200), computer science (#11, $56,200), software engineering (#15, $56,700) and information systems (#20, $49,500) take the cake.
Best or Be$t? What about the college? Though Harvard, Princeton and Williams College sit at the top of the traditional U.S. News & World Report rankings of best schools year after year, Payscale.com (which also has a “return on investment” ROI calculator for degrees) ranks schools by grads’ earnings. One of the best engineering schools in the country, Harvey Mudd in California, sees its grads enjoy a mid-career salary of about $126,000. The number-heavy Ivy’s, Princeton and Dartmouth, will get them around $123,000 mid-career and California Institute of Technology (Cal Tech) may get them a comfy $120,000 down the road.
Practical – or not? As for those not-so-practical but still impactful degrees like history ($38,500 to start, $73,000 mid-career), communications ($38,200 to start, $72,200 mid-career), philosophy ($39,100 to start, $72,900 mid-career), and fashion design ($37,700 to start, $72,200 mid-career), there is still comfort in knowing that earning an above-average living is very much a possibility.
And when it comes to degrees in the growing world of healthcare and going-green, there is much green: nursing ($52,700 to start, $68,200 mid-career), environmental science ($41,600 to start, $71,600 mid-career), and biotechnology ($47,500 to start, $70,100 mid-career).
The Finish Line: The biggest predictor of financial success post-graduation may be just that -- graduation! Forty-percent of college students going for a bachelor’s degree don’t finish school in four years—most take six years—and another 20% never graduate. College is a commitment. Get your student to stick to the program of four years or less—the sooner graduation looms, the sooner he can earn.
It’s not all about money, either. According to the National Bureau of Economic Research, college leads to better life-time decision-making, improves patience, promotes goal-oriented behavior, and improves social interaction. This is a different kind of capital that results in returns—human, emotional and social capital. It’s hard to put a price tag on that, but we can try!