INSIDER’S GUIDE TOCOLLEGE LIFEADMISSIONS Admissions 105
A
djusted for inflation, young college grads today earn less than their counterparts did a decade ago.
A Good Financial Investment?
So, is college still a good investment— measured not in naches and intellectual growth, but in dollars and cents? Yes. Even in hard times, the chances of getting a job are greater for college grads. In March 2013, the unemployment rate for those over age 25 who only had a high school diploma was 7.6%. For those with a bachelor’s degree or higher, it was 3.8%. You don’t need to master calculus to understand that math. And for people with jobs, those with B.A. degrees make more money—a lot more, on average. The typical worker— the one in the statistical middle, with only a high school diploma—earned about $28,000 last year. In contrast, the typical worker with a B.A. earned about $51,500 a year—80% more. Comparing workers of similar age, gender, race, and experience, college grads average 45% more than high school grads. Elite Colleges—A Better Buy?
Does it really matter which college you go to? Not as much as you think. Graduates of the most elite colleges, the ones that parents brag about at cocktail parties and on the back windows of their cars, do make more money than graduates of less elite schools. But is that because these students went to those colleges or because they were smarter or more driven in the first place? Researchers Alan Krueger (now chairman of President Obama’s Council of Economic Advisers) and Stacy Dale sorted colleges by their students’ average SAT scores and concluded: “Students who attended more selective colleges do not earn more than other students who were accepted and rejected by compara-
ble schools, but attended less selective colleges.” Students’ motivation, ambition, and desire to learn, they discovered, have a much stronger effect on subsequent success than the average academic ability of their classmates. Krueger’s advice: “Don’t believe that the only school worth attending is the one that would not admit you. That you go to college is more important than where you go.” As columnist David Leonhardt put it in a New York Times piece, a student with a 1400 SAT score who applied to the University of Pennsylvania but went to Penn State earned as much, on average, as a student with a 1400 who went to Penn State. Majors Matter
From the perspective of future earnings, a student’s choice of major is more important than where s/he gets the degree. Georgetown’s Center on Education and the Workforce tapped U.S. Census Bureau data to estimate the typical earnings of 171 college majors. “The bottom line,” says center director Anthony Carnevale, “is that getting a degree matters, but what you take matters more.” Petroleum engineers ($120,000/year) make considerably more than early-childhood education majors ($36,000/year). Sociology majors average $45,000/year, economics majors $70,000. Comparing College Costs
To compare the cost of different colleges, a good starting place is the U.S. government’s still-rudimentary College Scorecard website collegecost.ed.gov/ reform judaism
Col_Admiss105-6_Wessel_Cash_f13_be4.idml 44
44
scorecard. Typing in the name of a college will give you what it typically costs (note: the estimate does not apply to those whose family income makes them ineligible for financial aid), the percentage of students who graduate within six years, the loan size for the typical student borrower, and the percentage of students who default on loans. You can also search for colleges by size, programs, location, and more. It’s not a bad starting point if you’re choosing between a very pricey, prestigious college and one that’s a notch down on the prestigious rankings but costs a lot less. And the data can provide valuable warnings—for example, a four-year school from which fewer than half the full-time students graduate within six years deserves some scrutiny. The Education Department says some day it will add data on graduates’ average earnings, although the information will be limited to those who took federal student loans to help pay tuition. For assistance in demystifying the college financial aid process, visit finaid.org, a site started by financial-aid maven Mark Kantrowitz. Also the College Board site bigfuture.collegeboard.org is helpful. The Consumer Financial Protection Bureau site consumerfinance.gov/ paying-for-college has a calculator that facilitates apples-to-apples comparisons of student aid offers, and offers tips on comparing loans and grants. Payscale (payscale.com/collegeeducation-value) compares tuition cost to lifetime earnings for 850 colleges and publishes a rate of return on the investment. It says an engineering degree at
Zephy r Productions
Calculating the True Costs & Benefits of College
fall 2013
6/27/13 7:18 PM