Higher education is one of the most important investments that people make. And most students make this investment because they want a better chance to land a good career and higher earnings. But as they enter the labor market, some graduates earn far more than others. Graduates with the same major but from different schools can take home substantially different amounts of money. And earnings vary widely among graduates from the same school who have chosen different majors.
Based on information from five states that have shared earnings data with College MeasuresTM, this report shows that several factors influence earnings, including what degree graduates earn, what school awarded their degree, and the field in which the degree is earned. Right choices can lead to good careers and high earnings, but wrong ones can leave graduates with mountains of debt and poor prospects of ever paying off their student loans. Meanwhile, high debt is a national
problem: cumulative student debt now tops $1 trillion, and increasing numbers of students are not paying back their loans on time.
Because college credentials are usually associated with higher earnings, taking on reasonable debt or paying high tuition are not necessarily bad choices. Instead, the problem is that too few students know their potential earnings before they enroll in a postsecondary institution and before they take out loans to pay for their education.
Prospective students need sound information about where their educational choices are likely to lead. This information can save students money, keep them from making bad choices, and prevent a lot of future financial headaches.
Parents, students, and political leaders have been asking for better evidence of what happens to graduates after they enter the labor market. Although the federal government is making strides in this area,4 many states are far ahead on collecting earnings data about graduates of colleges and universities. College MeasuresTM is working with many of these leading states to make available to the public information about how much graduates earn.
Since mid-2012, with the support of the Lumina Foundation, College MeasuresTM has partnered with the states of Arkansas, Colorado, Tennessee, Texas, and Virginia to put the earnings of graduates in the public’s eye. With these data, anyone can learn about the earnings that graduates will likely earn for every program of study among colleges and universities in the state. In all states, earnings data now cover only the early careers of graduates.
These five states differ from each other in important ways—for example, in the strength of their overall and regional economies. But earnings data reveal some patterns across these states. Four lessons can be culled from these patterns. These lessons should help students make smarter decisions about what to study and how much to borrow.
View the full report here