Let's say you're
giving your niece or grandson some advice on which major to select in
college. Do you tell them to get an art degree, or take courses in
social sciences? Or should they focus on business and finance?
The decision should not ignore their natural abilities and interests, of course. But if they're
looking for the best return on their tuition dollar, then they might
consider spending their time in the computer sciences and math
buildings.
This information comes from a report published by PayScale.com, which helps people manage their careers and figure out what they're worth on the job market. PayScale's
research team tracked the median salary for people who completed its
salary survey online. They then compared the 20-year earnings of people
following different careers with what was earned, on average, by
competing workers with a high school diploma but no college degree. Then
they subtracted the cost of 4 years of college tuition, to arrive at a
return on investment figure-the additional
money the degree provided. Advanced degrees like law and medicine were
excluded; the survey focused on bachelors degrees.
The results were
striking. Business and finance majors came away with a respectable
$331,345 average ROI over 20 years, but they actually finished a distant
third on the list, just ahead of sales, marketing and public relations
($318,212). The highest ranking majors, by this metric, were computer
and math, whose degree-holders saw a net return on their tuition
investment of $584,339 over the 20 years after graduation. These nerdy
individuals nosed out the architecture and engineering graduates, whose
average ROI came to $561,475.
Life, physical and
social sciences majors fared somewhat less well, earning almost exactly
$250,000 more than their high school diploma competition. Graduates
with an arts, design, entertainment and related degree came in last in
the survey; they are expected to make a little over $125,000 as a result
of their college training.
Interestingly, the
PayScale website also tracks the average return on tuition investment
for different colleges. Graduates of Harvey Mudd College in Claremont,
CA can expect to earn nearly $1 million over the 20 years after
graduation, with a typical starting salary north of $75,000-with
a 4-year college investment of $237,700. Numbers 2-10 on the rankings
include the California Institute of Technology ($901,400 earnings,
$221,600 cost); The Stevens Institute of Technology in Hoboken, NJ
($841,000; $232,000), the Colorado School of Mines in Golden, CO
($831,000; $112,000); Babson College in Wellesley, MA ($812,800;
$230,200); Stanford University ($809,000; $233,300); the Massachusetts
Institute of Technology ($798,500; $224,500); Georgia Institute of
Technology ($796,300; $86,700); Princeton University ($795,700;
$217,300); and the Virginia Military Institute ($767,300; $95,700).
You can look up your own alma mater here: http://www.payscale.com/college-roi/
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Sources:
http://www.payscale.com/college-roi/
http://www.bloomberg.com/news/articles/2015-03-05/the-career-with-the-biggest-financial-payoff?hootPostID=293b20e2f9470947cb0facdcea7f70ea
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Sincerely,
Bill Morrissey, CFP® and Tammy Prouty, CFP®
Sound Financial Planning, Inc.
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