How Does College Affect Salary Potential?
The Census Bureau tells us that college graduates with a bachelor’s degree make 60 percent more than high school grads. So going to college is a no-brainer. (That’s if you don’t borrow absurd amounts of money to go. Rule of thumb from www.finaid.org: Don’t borrow more than twice your expected starting salary.) But which colleges offer the most salary potential?
Payscale.com recently came out with a report ranking schools in various categories – Ivy League, liberal arts, top party schools – by salary potential. In other words, which graduates in each category went on to earn the highest salaries? I’m proud, um, sort of, to say my alma mater, University of Illinois at Urbana-Champaign, boasted the highest salary potential for a party school. See chart below. (I’m thinking maybe I didn’t have enough fun in my four years.) U of I also ranks among the top state schools for salary potential.
Now remember, when it comes to building wealth, it’s not what you make, it’s what you keep. U of I’s starting salary is about $53,000 and its mid-career salary is $96,000. The Ivies Cornell, Brown and Columbia University have starting salaries of between $56,000 and $60,000, and mid-career salaries of $107,000 to $110,000. The difference in both cases is between a low of $7,000 to a high of $4,000. That’s pretty close.
Now let’s compare costs. For Illinois residents, U of I charges $24,714 for tuition, fees, books, room and board. Cornell’s charges $34,244 for state residents; Brown, $47,476; and Columbia $47,794.
Granted, most students don’t pay sticker price – grants and financial aid reduce the costs. But at mid-career, Columbia students earn $11,000 more a year than U of I grads on average – but they paid nearly double the amount for their education – an additional $92,320. If you have to borrow to pay for Columbia, that figure will be even higher.
Top Party Colleges By Salary Potential
Methodology Annual pay for Bachelors graduates without higher degrees. Typical starting graduates have 3 years of experience; mid-career have 15.5 years. See full methodology for more. |
There are other studies suggesting that 20 years down the road, students who were qualified to go to an Ivy but chose a state school earn the same as their Ivy peers. So don’t rule out a great state school. I graduated with no debt, and it made a huge difference in my ability to choose a career I loved, and start building wealth early.
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January 13th, 2010 at 12:38 pm
[...] student loans are “good” debt. These products unquestionably offer the opportunity to boost one’s career — college grads make 60 percent more than those with only a high school diploma. But the [...]
April 29th, 2010 at 8:05 am
I think you’re talking these things from a macro scale. Honestly, UIUC is a great school, but the recruiting especially in business related careers is much less. While the ivies have recruiting from top marketing, consulting and investment banking firms, UIUC will have big 4 auditors as the biggest names coming to their school. No disrespect to big 4 auditors but the salary potential between banking vs. big 4 auditing is quite vast.
Getting a college degree doesn’t guarantee someone a high income – in fact it doesn’t guarantee someone a job. It’s doing well at the university and getting recruited.