With the encouragement of President Obama, who is creating a "scorecard" to rate American universities on things like their graduation rate and affordability, families are starting to look harder at the cost-benefit equation of going to college. But a new report just out from the Georgetown University Center on Education and the Workforce suggests that this emphasis may be misplaced. The best predictor of the value of your degree is not where you go to school, or even whether you go to college at all—it's your major.
You may have heard that bachelor's-degree holders on average earn 84% more over a lifetime than people with only a high school diploma. But the highest-paying college major, petroleum engineering, pays $120,000, three times more—a 314% difference at the median—than the lowest-paying college major, counseling psychology. To put it another way, people who work hard for four years to earn a degree in counseling psychology end up earning $29,000 a year, a thousand dollars less than the average of young adults just out of high school with no college education whatsoever.
These numbers should influence how we decide whether a particular college is a good value. It can't be answered in the abstract; it hinges on whether the program is a good fit for a particular student. Most 18-year-olds have no idea what they want to be. No surprise, then, that about 80% of students end up changing majors. But if you start out in pharmacy ($105,000 a year, the second top-earning major) and discover your real love is early childhood education ($36,000), that posh private college just went from a fine idea to a risky choice.
Ironically, it's the high-paying technical majors that tend to have the most defectors, as undergraduates founder on calculus and organic chemistry.
College is not all about finding a job. There needs to be some room for exploration. One way to lower the risk of that exploration is to expand access to federal programs like Income-Based Repayment and Public Service Loan Forgiveness, giving students who choose lower-earning, but socially valuable, life paths the option to pay back loans in proportion to their income.
Another option that's increasingly likely with the unbundling of college—the availability of hundreds of individual college courses for free online, for example—is differential tuition pricing. Maybe in the future, engineering degrees and religion degrees, instead of costing exactly the same, will be priced what they are worth to the student.
[Image: Flickr user Aurelien Guichard]