Obtaining a college diploma has long been seen as a pathway to a promising career. However, recent data suggests that the type of degree you obtain can significantly impact your annual earnings.
According to recent data from the U.S. Census Bureau, college graduates between the ages of 25 and 64 had a median income of $74,154 last year. In comparison, workers over 25 with only a high school degree had a median income of $44,400 a year, according to the Bureau of Labor Statistics.
Despite this, the Census data reveals that some college graduates earn only slightly more than individuals without bachelor’s degrees. This is concerning considering the rising cost of higher education, which has led to a staggering $1.8 trillion in student debt. Many Americans are burdened with loans that will take years to repay. As a result, college students and their parents are increasingly seeking assurance that their investment in an expensive degree will pay off in the long run.
“Science and engineering majors, as well as business majors, tend to have higher earning potentials compared to humanities and arts fields,” said Adam Nguyen, founder of Ivy Link, a consulting firm that advises students on college applications. “However, as you delve deeper, certain studies indicate that the college you attend also has an impact.”
While the Census data doesn’t specifically examine earnings by college, previous research suggests that attending elite universities like Harvard or Yale can lead to higher earnings. This is another reason why parents often encourage their children to apply to prestigious schools.
A recent study by Opportunity Insights, a group of economists at Harvard University, found that an elite education can significantly influence a student’s career trajectory after college. By comparing applicants who were waitlisted for Ivy League and other highly regarded schools and comparing those who were ultimately admitted versus those who were rejected, the study found that those who were admitted were 60% more likely to have incomes in the top 1%.
Top-Earning Subjects
According to the Census analysis, Americans with college degrees who earned the highest median salaries last year pursued engineering. It’s important to note that earning a degree in a specific field doesn’t guarantee a career exclusively in that area, but it indicates that individuals have the necessary training to work in that industry.
Individuals with engineering degrees had a median income of over $106,000, as found by the Census.
On the other end of the spectrum, visual and performing arts majors had the lowest median income, just under $55,000. This is almost half of what engineering majors earn.
While this is around $11,000 more than the median annual income of high school graduates, the real question is whether the investment in a visual or performing arts degree is worthwhile in the long run, considering the cost of college education. According to a Gallup poll earlier this year, only about a third of Americans have confidence in the value of higher education, down from over half in 2015.
“People are examining the price tag of college, and it appears to be a significant expense. However, the larger concern is the uncertainty of the return on investment,” said New York Times reporter Paul Tough, who covers education inequality. “Overall, a college degree still holds value in the labor market, but there is much more variability. For some, it pays off greatly, but for others, it can lead to financial ruin.”
Experts say that more students are gravitating towards higher-paying fields like engineering and statistics for this reason. Meanwhile, enrollment in liberal arts degrees such as English and education has declined significantly in recent years.
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