Which Diploma is Worth the Most?
Many have tried to answer this question in terms of dollar value and failed. After all, projecting earnings across majors, industries and careers is pretty tough. Even in a consistent, predictable economic climate such projections can rarely be counted upon.
In an attempt to solve this quandary, Bloomberg has joined forces with PayScale to create the most accurate and detailed rankings yet.
This year's rankings include greater levels of quantitative depth and data. They also point to a trend which seemingly will not be ignored. Hard science and tech schools are taking over...or better yet, perhaps they already have?
Top Dogs and Fleabags
Not surprisingly the list of the highest ROI schools looks like an Ivy League mixer with a few outsiders thrown in for good measure. Though I am sure it comes as no surprise to many of you, Caltech took the number one spot in the rankings overall. With 30-Year Net ROI returns of over $1.7 million. That's almost $100K more than second place ranked Harvey Mudd and $200K more than 3rd place MIT. I have to be honest, the only Mudd I ever knew about in my pre-college days was the Mississippi variety...
The amount of polytechnic institutes and science geared schools ranked highly shouldn't surprise anyone. I do have to admit that I was puzzled by the relatively low rankings of perennial academic prestige houses like Georgetown, Johns Hopkins and the University of Chicago.
For the full list of schools and what they will supposedly pay out, (including some real head scratchers on the later pages) click here.
Takeaways
Clearly the trend toward a higher premium being placed on technical skills is apparent. That is not what jumps out at me, however. I am more curious about the ability to financially forecast the future earnings on the basis of diplomas. We do this in the financial industry all the time, but we look at assets and cash flows of established business. Here we are looking at the value of a diploma, but counting on the work of its holder to bring it value. It seems like the chicken vs. the egg argument spun on its head.
Are the increasing attempts to quantify something dependent on future effort of individuals a good way to go about valuating collective systems? Are these weighted and averaged Net ROI returns the sort of thing kids and parents should look at before choosing a college to attend?
Finally, are the traditional beacons of educational power beginning to dim or will it be business as usual for them? Is higher education shifting towards a far more specialized model and will these payouts be as high or low as predicted?
Well, something the study neglects to take into account is the background of the students who attend. i.e. Many people who attend the Ivy schools come from exceptionally wealthy, privileged backgrounds that allow them to simply enjoy the whole college experience with no real desire or need for a career after. You could argue that that lowers the statistical ROI figure if someone doesn't need the degree for any financial reason, only to carry on a family or social tradition.
You could also argue that degrees from the Ivys lead to success, not because of the name on the diploma, but because of these silver-spoon backgrounds you mentioned. I know strong connections, affluence, and academic excellence often go hand in hand, but it'd be cool if they could isolate those factors and "normalize" the actual return of a certain college degree. I.e. a job handed to you by Daddy wasn't earned through the college you selected.
Also, oh the irony, NYU-Poly outplaces NYU, as does Fordham, NJIT, and a whole host of others.
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This... I'm not going to read the whole article because I'm pretty sure I did around a year ago for the same study, but if they don't account for cost of living, then I recommend you don't read it either.
What a doughbag ranking system. Your major has a better correlation to your earning potential than school. If you want to make money go into finance, medical, engineering, or computer science.
In any case, Yee-haw- UIUC for the win on ROI. Cross-reference this with tuition, and Illinois has an IRR of about 30%.
Yeah I agree with your point Wolfpack. It would be interesting if they did a survey that controlled for parents income levels and education. I think those 2 factors would be a rough measure of affluence for a large sampling.
Yes, but a large portion of those same Ivy kids from wealthy families are more likely to take low-paying non-profit sector or altruistic jobs because their family/education gives them access to these opportunities.
Kids from less wealthy background/worse schools are FORCED to take lower paying jobs due to less opportunity.
I don't think prospective college students or their parents should let rankings such as this sway their decision. In my opinion, it's the individual who determines his/her own success. As many people have pointed out on this forum, your resume will get your foot in the door but it won't do the talking for you in the interview. A strong candidate from a state school and a strong candidate from an Ivy are on a level playing field once that superday starts and the door shuts behind you. You just have to hustle a little more to get the invite.
It would be unfortunate if parents used this to convince Billy that he should go to XYZ University because he'll allegedly make 6% more over the first 10 years post-undergrad
The problem with this study is that it looks at what graduates have done, not what they could have done. You have engineering schools ousting ivies because for every banker at an ivy, there are two English majors that go to a non-profit.
Engineering majors usually become engineers, and make good (though not phenomenal) livings. Higher mean, way lower standard deviation.
The value of the degree should answer the question, "If this student prioritized salary above all else, how much could he probably make?"
Pretty meaningless survey.
The top 3 schools are all engineering and science oriented institutions. Tech/science jobs have always paid above average salaries. And since the top 3 schools are engineering and male-heavy schools, you're more likely to have graduates who take tech/science jobs and are more likely to remain in the workforce and not drop out to bear and raise children.
Most liberal arts colleges have lots of kids who dabble in sociology, art history, writing, lit, etc. and go on to careers that are less lucrative but perhaps more fulfilling to them.
I'd be more interested in comparing departments across universities.
JHU ranks lower than expected because the arts and sciences school is bigger than the engineering school, IIRC 60/40 split. JHU's writing and international relations programs are enormous, and none of the career tracks emerging from those majors are particularly lucrative. Pay for government service is notoriously shitty.
The reason U of C, JHU and GTown place so low is precisely because they are "academic" schools with more clout in academics than on Wall Street/ general workplace. If you look at U.S. News' rankings of those school in general, they al rank high in every category except employment (especially JHU).
Agreed - this ranking rewards schools who send many grads into business rather than academia and public service. There is a place for both kinds of education
the world rewards people that go into business rather than academia and public service. business creates the wealth, academia/public "service" spends it.
Ok you can leave in a world without science (stuff like cancer research is science you know) art or military (those idiots who choose to forgo money to defend their country), I don't want to
Also a reminder, you are not a businessman - you are a junior banker who likely creates little value yourself mostly creating excel spreadsheets and PowerPoint presentations that mostly don't get used - just remember the last time you were asked to create value by changing a font or moving a comma
I think it has less to do with people going into academia/public service and more to do with students wealth background. Kids who go to IVYs either go into extremely high paying fields such as banking or go into extremely low paying jobs such as non profit or social services. This is possible because the school has a broad academic selection and their parents often have extremely large amounts of money which makes the 30k a year salary from a non profit vs a 65k a year salary from a tech degree not matter at all.
I would say San Jose state and possibly other state school students with high GPA, because most students here including me work 1-2 part-time jobs to support their ways through college. A degree in san jose state = college degree from other colleges + lots job experiences + good work ethics (70 hours a week of total work time).
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