Dr. Watson Scott Swail, President & CEO, Educational Policy Institute
Yesterday, Yahoo Finance posted an article on the worst-paying college degrees in 2010 (see below). Among them are education ($35,100 starting; $54,900 mid-career), special education, child and family studies, and social work.
For those of you that follow the trends on return on investment from advanced degrees, the stable outcome of the past decade-plus is that only advanced degrees, such as law, medicine, and other professional levels, are beating inflation. BAs are holding steady, but anything else, including the now-vaulted associate degrees, are losing ground. The College Board and other organizations have touted the million-dollar difference a college degree makes on earned income over a lifetime. I’ve made that argument myself, with several caveats (including investment income, etc., which others don’t make). But Bloomberg Businessweek came out last month and said that the million-dollar hype is bogus. Their estimate is $400,000 over a lifetime in earnings, with great variety across schools. Only 17 institutions in the United States, for instance, has an ROI of $1.2M or more. You can check out the worth of your college or university degree at this website.
A real problem is that many students entering higher education end up in a lower-wage career, such as education and social work. While this is good because we need talented, educated people in these all-too-important-to-society positions, the net cost to the individual can be somewhat devastating.
Worst-Paying College Degrees in 2010
College Degree Starting Pay/Mid-Career Pay
20. Art History $39,400 $57,100
With an tuition and fee cost of $7,020 at a US four-year institution and approximately $5,000* at a Canadian Institution ($19,388 and $13,000, respectively, for in-state/province with room and board), the total cost of education can be staggering. Assuming the latter, we are talking about $80,000 and $52,000 in total costs, before grant aid, for a four-year degree. True, some of those occupations noted in the table require an associate’s degree, but most are in four-year university territory.
What we have to come to terms with, and this would be a great study to conduct (and certainly doable with current data), is the trend in repayment of degrees by occupation (perhaps EPI will do this when the new Beginning Postsecondary Student Study comes out in a few weeks). That is, how long does it take, on average, to repay the cost of a degree by occupation. My assumption is that this is lengthening dramatically for all occupations, as the cost of an earned degree has exploded over the past two decades, but more importantly, has risen exponentially for those in lower-wage occupations.
All of this is occurring concurrently to the push for more higher education at more cost to both the consumer and the taxpayer. Every student who goes to public higher education has a public subsidy attached to their enrollment, and almost every student takes out a student loan of some type (and credit cards must also be considered a “loan”). Thus, there are real consequences for going to college, and the return on investment, yes, the much vaulted ROI, must be a real consideration for students as they look at their career goals and trajectory.
How much is too much? My friend Tom Mortenson has always said that the only thing more expensive than going to college is not going. That is not so true anymore, unfortunately. I think most of us still support the tenet that those with a college/university degree open doors of opportunity simply not afforded to others, let alone a fiscal ROI, but we cannot ignore that the increased cost of higher education and a weakening economy in key social areas is rapidly eroding the benefit of a degree.
Interested in your thoughts.
*Charges for 2010-11 at University of Manitoba, to use as an example.
The Swail Letter on Higher Education 
I’m sorry but we can bring back GW Bush and have him improve upon his economic performance and my college degree will be worth just as much to me tomorrow as it is worth today. It really doesn’t make any difference what my job/occupation is, even if work is available. The value and worth of my education remains and grows. ROI in the world of learning, education and enabling individuals to decide for themselves is bogus.
This piece raises 2 issues.
First, is it worthwhile for society to continue supporting so many higher education students at such a high cost? For this a return on investment is a relevant calculation since it shows whether society gets a better return on investing $80,000 in educating a student highly or funding a hospital bed, improving mass transport or helping end global warming.
But even this is severely limited. Only 6 of the colleges in Bloomberg’s list of the top 50 by return on investment are public, suggesting that if the state wants to maximise society’s return on investment it should redirect its support from the recruiting public colleges that dominate the bottom of its table to schools such as MIT, Caltech and Harvard which have the biggest returns on investment.
And this suggests one of the flaws of the analysis. For while some of MIT’s graduates’ high earnings are presumably due to the value of its excellent education, a lot of their premium earnings are due to elite schools’ cachet or positional vale (Hirsch, 1976) – the contacts they foster amongst the privileged. Since this is just a mechanism for class reproduction it is not an educational benefit conferred by elite schools, and indeed, some of us consider this a negative effect.
The second issue is whether it is worthwhile for a high school senior to attend college. For this a return on investment is not a relevant calculation since few pupils have access to $80,000 capital which they may choose to invest in their own education or on the stock market, for example.
For prospective students the relevant calculation is the net expected lifetime benefits from just completing high school, completing a 2 year degree, completing a 4 year degree or completing graduate school. And in this there remains a consistent linear net benefit from longer education, altho this may have reduced somewhat recently.
Hirsch, Fred (1976) The social limits to growth, Routledge & Kegan Paul, London.
wow