A new study has found that while some college degrees are worth millions of dollars in increased earnings, other degrees are worth nothing at all. Whilst the finding may be unsurprising to many, it has long been a claim of universities that the mere act of graduating from a university predicted higher earnings.
The issue with that claim, as the reports notes, is that whilst on average a bachelor’s degree increases a graduates expected lifetime earnings by $306,000, that number is dramatically increased by degrees with a high return on investment. So, 12% of degrees will increase your lifetime earnings by over 1 million, but between 16% and 37% of degrees, depending on how broadly you measure the costs, either made no financial difference or actually lowered a graduate’s expected lifetime earnings.
The report, which was carried out by The Foundation for Research on Equal Opportunity (FREOPP), estimated the increase in lifetime earnings, minus the cost of going to university, for nearly 30,000 bachelor’s degrees at 1,775 colleges and universities in the USA.
Their analysis reveals that, when you take into account the cost of college, the lost earnings students could have earnt by going straight into work, and the likelihood of a student taking extra time to complete their study or dropping out, 37% of bachelor’s degrees are either worth nothing, or will actually lower the expected lifetime earnings of students.
Amongst the fields of study that gave the greatest return on investment where engineering, computer science, nursing, and economics, all of which increased expected lifetime earnings by over $1 million. Most art, music, religion, and psychology programmes left students “financially worse off than if they had never gone to college at all.”
Whilst the reports notes that there are engineering courses that will lower your lifetime earnings, and psychology courses that will increase them, you can broadly group degrees as having a high or low return on investment. The report argues that their results mean that the choice of which college you attend is less important than the subject that you study, and that choice of subject you will graduate in is likely the single most important financial decision people will ever make.
The best return on investment came from the computer science undergrad at California Institute of Technology, or Caltech as it is more broadly known. Graduating from this programme increased a graduate’s expected lifetime earnings by $4.4 million.