Is college worth it? The data says yes…sometimes

A recent survey conducted by the Wall Street Journal (subscription required) and the research organization NORC at the University of Chicago revealed that 56% of Americans believe a 4-year degree is not worth the financial burden.

Participants were asked whether they agree or disagree with the following statement:

The survey’s results align with a well-established trend: the perceived value of a 4-year degree has shifted over time. Factors such as soaring tuition fees and student debt, as well as an uncertain economy and shifting job market demands, have cast doubt on the value of a college degree.

In such a climate, making well-informed decisions about your education and prioritizing colleges and programs with a proven positive return on investment (ROI) is more important than ever. Unfortunately, most college rankings don’t deliver.

College return on investment (ROI) and school rankings

You may have heard about recent criticisms of college ranking giants like U.S. News. U.S. News first began ranking colleges back in 1983. It was a different world then – the first Mario Bros. arcade game had just come out, and college was a lot cheaper.

U.S. News rankings were, and still are based on factors like “student selectivity”, “alumni giving”, and “faculty salaries”. Expensive prestigious colleges top their list, and college ROI is not a ranking factor. It’s an outdated ranking model, and that’s why it’s under attack.

Students can no longer afford to go to college based on a vague promise of future success – they need to know that the money they invest in college will actually pay off.

A lot has changed since 1983. Students can no longer afford to go to college based on a vague promise of future success – they need to know that the money they invest in college will actually pay off, but traditional college rankings don’t provide that kind of information.

Our ROI approach to college rankings is based on data from the Department of Education. To help prospective students and parent decide if a (specific) college is worth it, we analyze factors like:

1. the cost of tuition after grants and scholarships
2. how quickly students graduate
3. how much graduates earn after college

Is going to college worth it? It depends on the college

According to our data, for most people, college is worth it, as long as you don’t pick the wrong school. Within 3 years of graduating from one of America’s top 100 public universities, the average student:

• Earns at least double the average wage of a high school graduate, and in many cases, well above the national wage average of $45,760.
• Has earned back what they invested in college with the extra money they made compared to a high school graduate.

We’ll refer to these 2 factors as college ROI. While college ROI varies greatly depending on the school you choose, your major may play an even bigger role.

College ROI and your choice of major

The WSJ article presenting the survey results on the value of college includes several “case studies” featuring individuals who regret their college education. One example is a woman who, in 2003, earned a bachelor’s degree in equine (horse) studies from a private liberal arts college. She graduated with $85,000 in student loan debt and few career prospects. Twenty years later, she earns $36,000 a year as a dialysis technician and her student debt has ballooned to $145,000.

While the WSJ journalists chose a sensational example to feature, it does prove a point. Your college major has a big impact on the “real” ROI of your degree.

Your college major has a big impact on the “real” ROI of your degree.

The reality is that certain careers pay a lot less than others – and, unfortunately, salaries don’t always match up with how important or meaningful a profession is.

• With a bachelor’s in education, you’ll be earning an average of $37,414 three years after college, and around $61,000 in the long run if you become a teacher.
• With a bachelor’s in engineering, you’ll earn an average of $70,786 three years after graduating, and $80,000+ as an engineer long term.

Does that mean you should not consider a teaching career and we all need to flock to STEM degrees? Absolutely not.

But it does mean you need to carefully weigh your options and do a risk assessment before getting saddled with student loan debt. In the next section, we’ll show you ways to do that.

» Read: Tuition-free colleges

The paradoxical value of a college degree

Let’s go back to 1983. (Cue “Total Eclipse of the Heart” by Bonnie Tyler.) Aside from the cost of college, something else was very different then. You could do most jobs without a college degree. If you had a degree, you stood out from the competition. Today, close to half of all jobs require a bachelor’s degree and it has become a lot more common to have one. That makes a degree more important (you’re more likely to need it) but less valuable (you don’t stand out if you have it).

Is getting even more education the answer? Sometimes, yes. Is your employer subsidizing all or part of your MBA? Sounds like a good deal. But getting a master’s or even a bachelor’s degree without understanding the economic outcomes? Maybe not so wise.

Should I go to college? Questions to help you decide

Here are a few key things to think about to help you decide if college is worth it and maximize the ROI on your degree.

What job do you want after college?

Talk to friends and family and your career counselor and try a personality assessment to help you decide. At this early stage, you don’t need to focus on salaries. Instead, think about what makes you happy and what you’re good at. To find out if there is lots of demand for the job you’re interested in, you can explore the Bureau of Labor Statistics website.

Do you need a college degree to do that job?

If you don’t need a degree to do your dream job, it may be a good idea to get into the career first and then consider college at a later stage, if at all.

Let’s say you want to work with horses, like the unfortunate person in the WSJ article. One of the best-paying careers you could choose is becoming a vet. That will take you about 8 years, as you need a doctorate, and you’ll need to be good at math and science to get through veterinary school.

If you just care about being around horses, you could become a ranch hand, earning around $14 an hour. Should you get a bachelor’s in agricultural animal services to become a ranch hand? Probably not. You can do it with just a high school diploma or GED, and the bachelor’s degree would cost you around $84,816. It would also take you 19.3 years to see a return on investment (the average for all bachelor’s degrees is 3.8 years).

Do you need a 4-year degree?

If not, consider an associate degree or trade school. These programs are typically offered at a fraction of the cost and time investment of a 4-year degree. There are several well-paid, high-demand jobs you can do with a 2-year degree or trade school diploma, including engineering technician, dental hygienist, and paralegal. You can always transfer credits towards a bachelor’s degree if you decide to advance your career.

Do you need a specific major?

Some majors are “vocational”, and you need them for specific professions. Earning the degree you need to get the job you want will almost always pay off in the long run, if you choose a high-value school.

For example, to become a social worker, you need a CSWE-accredited bachelor’s in social work. Choose a high-ROI social work program, and you’ll be well on your way to a stable career. It may take a little longer for your degree to “pay off” than say, an engineering degree, but social workers earn above the national wage average a few years into their career and are always in demand.

If you don’t need a specific degree, you have several options:

1. Choose a high-ROI college that meets your other criteria (e.g., it’s in your state or offers good financial aid) and don’t worry too much about what you’re majoring in.
2. Choose a high-ROI program that’s adjacent to your interest. Let’s say you want to become a psychologist. A bachelor’s in psychology pays around $35,412 three years after graduation. You could do a bachelor’s in cognitive science or human resources instead (both of which pay around $47,000). Then, if you still want to become a psychologist, you can pursue your doctorate (and you won’t need a bachelor’s in psychology to do that). Or you can enter the workforce, and likely earn a lot more than someone with a bachelor’s in psych.

Choose the best college for the program you want. Let’s say you want to do that bachelor’s in psychology after all. Knowing that it’s a pretty low-ROI degree makes it even more important to choose a high-value school. Use our program rankings to help you see which schools have strong ROI for the major of your choice.

Students need tools, not fearmongering

In today’s America, college represents a significant financial decision. Unfortunately, it is not always treated with the seriousness it deserves. The Wall Street Journal survey exposes a concerning reality – many people went to college without a clear vision for their future or an understanding of whether they can earn enough to repay their student loans.

But given that the majority of jobs require a 4-year degree, opting out of college is not a viable choice for many people. Instead of instilling fear, prospective college students need effective tools that can help them determine if college is the right choice for them, and which schools and programs are truly “worth it”.