A college degree is expensive. If you’re going to spend the money you want a good ROI. These are some of the highest-paying college majors.
College is Expensive
There is $1.3 trillion in outstanding student loan debt in America. The average student will graduate with $37,172 in debt. More and more people seem to be unwilling to add to that number. Between 2010-2014 enrollment was down 800,000 students.
Graduating with that kind of debt has long-term consequences. Currently, about 44 million of us have student loan debt and seven million of us are in default. The average monthly payment for those ages 20-30 is $351.
That is over $4,000 a year we don’t have to spend on consumer goods, mortgage, and car payments. That hurts the overall US economy. That’s also $4,000 a year we aren’t investing and saving towards retirement.
When people are burdened by debt, they have to delay or forgo things like marriage, children, and starting a business. It also has negative effects on the community. If people don’t have much disposable income, they have less money to donate to charities. If they are working long hours or two jobs, they don’t have time to volunteer for charitable causes.
And the psychological impact of all the debt has consequences too. It can cause or exacerbate depression and anxiety. It can cause stress and fights between partners. It can make people feel ashamed and scared. It can lead to feelings of hopelessness. That no matter what you do or how hard you work, you will never be able to pay off that debt.
Is College Worth It?
Given that it is so expensive, is it still worthwhile to get a college degree? Not for everyone. Some people aren’t college material for a variety of reasons. That doesn’t mean they can’t still earn a good income. There are plenty of jobs that pay well but don’t require a degree.
But overall, college is still worth it. Those with a four-year degree earn at least 53% more than those with only a two-year degree and at least 60% more than those with just a high school diploma.
Your chances of being unemployed are greatly reduced by having a four-year degree as well. The unemployment rate for those with a high school diploma is 5.4%, 2.8% for those with a four-year degree and just 1.7% for those with a doctorate.
Not everything is about money, though, and there are plenty of good reasons to get a college degree that has nothing to do with money. College teaches critical thinking; you meet people that will become friends and possibly more, you will develop connections that can help you advance in your career, tailgating is awesome. All good, legitimate reasons to go to college.
So yes, going to college for most people is a good idea. With one very big caveat.
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ROI
ROI means return on investment. To calculate ROI subtract the gain from an investment from the cost of that investment and divide that number by the cost of the investment.
College is an investment both of your time and your money. If you’re going to spend those things, you want it to be worthwhile. And while not everything is measured in dollars, college is one of the things that is.
Yes, you gain things that have nothing to do with money, but if you are going to go into debt to get a degree, that degree has to pay off.
We all have subjects we’re interested in and that we would like to pursue and possibly make a career out of. But not all college degrees have the same ROI. You need to choose a major that makes you money, so you aren’t hamstrung by debt right out of the gate.
The gap isn’t small either. The difference between the best and worst paying college majors is more than $3 million over the course of a career based on median wages. So choose wisely.
Highest Paying College Majors
All of these listed are not the highest paying college majors. Not all of us want to go into STEM. Rather, these are college majors that pay well enough to give you a good ROI.
Pharmacist
What They Do: Pharmacists dispense prescription medication and advise patients and doctors on drug selection, dosages, and possible side effects and interactions.
Best School: University of North Carolina at Chapel Hill
Yearly Out of State Tuition:$49,712
Median Salary: $110,000
Expected Ten Year Job Growth: 3%
Actuary
What They Do: An actuary analyzes data to estimate the likelihood and estimated cost to a company in the event of things like death, illness, injury, or property loss and damage. Most actuaries work for insurance companies, either in life and health or property and casualty insurance.
Best School: University of Nebraska-Lincoln
Yearly Out of State Tuition: $23,058
Median Salary: $107,740
Expected Ten Year Job Growth: 18%
Compensation and Benefits Manager
What They Do: Compensation and benefits managers plan and oversee programs that determine how much a company pays employees and coordinates benefits like retirement plans and health insurance. Human resources basically.
Best School: University of Michigan
Yearly Out of State Tuition: $45,410
Median Salary: $102,094
Expected Ten Year Job Growth: 6%
Economist
What They Do: Economists look at how resources like land, raw materials, and labor are distributed across society. They research, collect and analyze data to forecast economic trends in areas of interest rates, inflation, and employment among others.
Best School: University of Michigan
Yearly Out of State Tuition: $45,410
Median Salary: $99,180
Expected 10 Year Job Growth: 6%
Information Security Analysts
What They Do: Information security analysts protect computer networks from cyber attacks by installing things like firewalls and other security measures.
Best School: Johns Hopkins University
Yearly Out of State Tuition: $50,410
Median Salary: $93,250
Expected Ten Year Job Growth: 18%
Petroleum Engineer
What They Do: Despite a move toward green energy, gas isn’t going away anytime soon. Petroleum engineers design equipment and methods used to extract oil and gas. They also develop plans to drill for and then extract gas and oil.
Best School: University of Texas, Austin
Yearly Out of State Tuition: $35,906
Median Salary: $89,000
Expected 10 Year Job Growth: 10%
Intelligence Analyst
What They Do: Intelligence analysts work for the government to collect information from various sources to assess possible threats to the country.
Best School: There is no “intelligence analyst” major. You can major in several subjects to qualify including criminal justice, political science, and international law to name a few.
Yearly Out of State Tuition: N/A
Median Salary: $86,100
Expected 10 Year Job Growth: 5%
Health and Safety Supervisor
What They Do: A safety supervisor does workplace inspections to make sure the site is safe. They can work in places like hospitals, construction sites, and factories.
Best School: Embry-Riddle Aeronautical University-Prescott
Yearly Out of State Tuition: $31,648
Median Salary: $83,320
Expected 10 Year Job Growth: 4%
Systems Engineer
What They Do: A systems engineer develops, tests and evaluates software, circuits, personal computers and designs and implements computer systems.
Best School: Massachusettes Institute of Technology
Yearly Out of State Tuition: $48,452
Median Salary: $68,000
Expected 10 Year Job Growth: 7%
Nursing
What They Do: Nurses work in hospitals, clinics, and doctor’s offices taking care of patients.
Best School: Johns Hopkins University
Yearly Out of State Tuition: $50,410
Median Salary: $53,300
Expected 10 Year Job Growth: 26%
Accountant
What They Do: Accountants collect, analyze, verify and prepare financial documents for their employer or clients.
Best School: Bentley University
Yearly Out of State Tuition: $45,287
Median Salary: $49,349
Expected 10 Year Job Growth: 11%
Factors in ROI
Unfortunately, calculating ROI for college majors is not straight forward. There are several factors you have to take into account.
Net Cost
The numbers I provided are just for tuition and fees. They don’t include books or room and board since those numbers will be different for everyone. But to get as close to the real ROI as you can, you need to include those expenses as well and four all four years (at least).
Actual Debt
There is no reason to take out enough money in student loans to pay for every cent of your college expenses. Live at home rather than on campus, work part time while going to school part time, apply for as many grants and scholarships as you can, find a job that will reimburse some of your tuition.
The amount you’re able to pay from year to year will vary, but again, it’s going to at least give you a ballpark ROI to work with.
Graduation Time
Not everyone graduates in four years, in fact, 59% of those in an undergraduate program take six years to finish. If you are going to major in something that requires an advanced degree, account for the additional years of expense as well.
Rule of Thumb
Okay, this is a lot of math, and the best you’ll be able to get is a ball park figure. This rule of thumb for taking out student loans is simpler. Never borrow more money than you can expect to make in salary your first year out of college.
If the career you will pursue with your degree pays a $60,000 starting salary, you don’t borrow more than $60,000 in student loans.
What Kind of Loan?
What kind of loans you take out matters too. There are two types of student loans, federal and private. Federal loans are funded by the government. Private loans are made by lenders like a bank or credit union. There are some key differences between them.
Federal Loans
Federal loans come with more benefits and protections than private loans, things like fixed interest rates which are typically pretty low(the average is from 4.29-6.8%) and various repayment options.
You don’t have to start paying back federal loans until you graduate, quit school or are attending less than half-time. Most federal loans don’t require a cosigner or credit check and can help establish a credit profile.
The interest on federal loans may be tax deductible, and certain students will qualify for subsidized loans which mean the government pays the interest while you are attending college.
If you work in public service, you may be eligible for student loan forgiveness one day. If you are having trouble making your monthly payments, federal loans come with programs that can help you.
Private Loans
Many private loans require repayment to start while you’re still attending college. The interest rates are typically higher than those of federal loans (between 9-12%) and may be variable. Private loans are not subsidized, so you are responsible for all of the interest.
Most private lenders require a credit record which most 18-year-olds won’t have so you will probably need a cosigner. The interest is likely not tax deductible.
Private loans won’t offer much in the way or forbearance or deferment plans if you run into trouble paying your monthly bill. If you want to repay the loans early to avoid interest, you may be hit with a penalty fee.
As much as possible only take out federal loans.
Bankruptcy
You can walk away from business debts half a dozen times in this country, but you cannot walk away from student loan debt under almost any circumstances. To have the debt discharged, you must prove “undue hardship.” That paying back this money means you would be unable to maintain a “minimal standard of living,” your financial hardship would continue throughout a majority of the time it took to pay back the loan, and you must show that you made a good-faith effort to pay back the loan before filing for bankruptcy.
This last one is probably the biggest hurdle. People are unlikely to try to discharge student loan debt unless they are in default. Being in default will likely be interpreted as not fulfilling the last condition.
So once you take out this debt, the only way to get rid of it is to pay it back.
But If You Must…
Money isn’t everything, and some people want to pursue a certain career even it means it won’t ever pay well. There’s nothing wrong with that, but if this is the case, you need to make certain choices that will mitigate a low paying career.
Don’t choose the best school that accepted you if there is a much lower cost alternative. Or do the first two years living at home and attending a community college and then transfer (be sure you can meet the requirements to transfer to your chosen college), take longer to graduate because you’re working part or full time to pay your tuition without loans.
Apply for as many grants and scholarships as you can. And if you can find your chosen career in the public sector, you may be eligible for student loan debt forgiveness.
There is No Maximum Age For College
If you have to take a job in a field that you don’t feel particularly passionate about to make a lot of money and not sink under the weight of student loan debt it doesn’t mean you can’t one day pursue the career you are passionate about.
We talk a lot about early retirement, but the meaning of retirement can be whatever you want it to be. If you save, invest, and spend correctly, you can retire very early leaving you time to go back to school and start a second career. And this time it won’t matter how much or how little you make because you’ve achieved financial independence.
Have a Plan
College is still worth it, but you have to have a game plan. We listed the best school for each major but you can see the price tag that comes along with that. You don’t have to attend the best school you can get into if it doesn’t make sense financially. Picking a school, you can afford without taking out six figures in debt is as important as picking a major that will allow you to pay off whatever debt you do incur in a timely way.
We aren’t all cut out to work in STEM fields even though they will typically pay very well. But there is surely something on this list that you could, if not be in love with, be reasonably happy doing at least until you were in a position to do something you do love.
And if you just can’t be persuaded, get as much free money for college as you can, take longer to graduate, and plan to work in the public sector long enough to have your debt forgiven. $1.3 trillion in student loan debt is enough, do what you can to avoid adding to it.