With the media focusing on the proposed “Human Infrastructure Bill,” including the proposal for free community college, a recent report by Bankrate.com on the most and least valuable college majors got my attention — and, if you are college bound, you should be very interested in the report.
Before we get to the report, we should review some of the college-related issues that we have covered in the past, given the high cost of college these days, and the increasing problem of excess and unaffordable student loan debt.
First, it is important for every student to determine whether college is really the right decision for them, based upon things like their interests in academics and otherwise, past academic success, finances, work ethic, etc. It is important to remember that ambitious and hardworking Americans in the trades can make a great living, and they had no college expenses and no student loan debt. I saw and heard a media piece this past week that reported that truck drivers were starting off with salaries in the mid $50,000s. Also, in many other trades, you can get paid in apprenticeship programs while you are learning the trade.
Second, if college is the right direction, look at how you can minimize college costs and any student loan debt. One way is looking at 2+2 programs (two years of community college with credits that you can transfer to a four-year college or university where you can complete your education and major).
This is why I have no problem with a proposal for free community college FOR TRULY ELIGIBLE STUDENTS, with some accountability for the student’s performance, if that proposal is what the American taxpaying public is in favor of.
Third, if a college degree is the goal, it is critical to look at the financial return on investment (“ROI”), for any degree, as well as the ability to repay any student loan debt, so that you can, in fact, meet all of your financial, life and career goals in life. I know that money is not everything, it has never been for me, but it is something to very seriously consider.
In that regard, as we have so often discussed, it is critical to research the average salaries in the career you are looking at, and I like to say for the first five years in that career.
That said, here are some of the highlights of the Bankrate.com report for careers, which may or may not surprise you.
The study ranked 159 majors based on several factors pertaining to degree holders (weighting in parenthesis): median annual income (70%), unemployment rate (20%) and career paths that do not demand schooling beyond a bachelor’s degree (10%). Architectural Engineering ranks as the most valuable college major while Visual and Performing Arts ranks as the least valuable degree.
— Architectural Engineering majors earn a median annual salary of $90,000 (tied for 17th highest) along with a low unemployment rate of 1.3% amongst graduates (9th best). The percentage of Architectural Engineering majors with an advanced degree (29.3%) is also relatively low (45th lowest), meaning Architectural Engineering graduates are less likely than many others to incur the added expense and/or deferred income of an advanced degree.
— Those with a Visual and Performing Arts degree earn the lowest median annual salary ($35,500) and face a 3.6% unemployment rate, 17th highest of any major. Additionally, 28.7% of Visual and Performing Arts graduates have invested in an advanced degree, more than 41 other majors.
— The top five most valuable college majors are: Architectural Engineering, Construction Services, Computer Engineering, Aerospace Engineering, and Transportation Sciences and Technologies.
— The bottom of the ranks include: Clinical Psychology, Composition and Speech, Drama and Theater Arts, Miscellaneous Fine Arts, and Visual and Performing Arts.
— The prospect of a high salary isn’t everything when it comes to assessing the value of a specific college major. For example, Nuclear Engineering — tied for the fourth highest median income among degree holders ($100,000) — fails to crack the top 25 most valuable majors overall (27th) due to a 3.7% unemployment rate amongst graduates (15th highest). Additionally, about half (50.6%) of those with a Nuclear Engineering degree have gone on to earn an advanced degree (41st highest).
— Furthermore, an advanced degree doesn’t always translate to higher earnings. Four of the five majors with the highest percentage of advanced degree holders (ranging from 73.5% to 94%) do not earn a top 50 median salary.
You can see the report at https://www.bankrate.com/loans/student-loans/most-valuable-college-majors/
While we are on the subject of college, The Wall Street Journal recently published its 2022 Rankings of U.S. Colleges.
The rankings are based upon 15 key indicators that assess colleges in four areas: Outcomes, Resources, Engagement and Environment.
Outcomes account for 40% of the weighting, and measure things like the salary graduates earn, graduation rate, and the debt burden they take on. For this indicator, the top schools shouldn’t be a surprise. They are: Princeton, Yale, Duke, Harvard, MIT, Stanford, Cornell, California Institute of Technology, University of Chicago and Dartmouth.
The top ten schools overall include many of those schools, but also Brown, Johns Hopkins and Northwestern.
My alma mater, Georgetown, was number 32 out of 500. Local colleges include The University of Rochester (# 52); RIT (#154); St. John Fisher (#320); and Nazareth (#377).
You can and should see the report at wsj.com/collegerankingsreprint.
On a final subject, as Americans start their holiday shopping, it appears that the “Buy Now Pay Later” trend is increasing, especially among those who don’t have credit cards or have less than stellar credit scores and credit reports. Reports and research indicate that retailers are seeing higher sales and profits as a result, even though the fees they incur, often between 3% and 5%, are frequently higher than credit card fees. If you are going to buy now and pay later, be sure that you understand any interest or fees that might be due for late or missed payments.
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo.