Often what pushes young students, and even more so their families, to lean to a specific degree or college is their prestige. There is a widely accepted assumption that the better your college, the better your degree will be. And that down the line, these factors will lead to a better job and a bigger salary afterwards. The result is that students and their families fork out thousands in tuition now, with the confidence that the student will earn it back later.
Eric Eide and Michael Hilmer decided to investigate this assumption, and discuss their findings in an article for the Wall Street Journal. From their research, they conclude that the belief that a better college will end up with a better salary is not always correct. For some specific subjects, it will play a role in how much you earn down the line, but it is a dangerous belief to hold for all specialities.
The greatest peril of this assumption is that on leaving school, graduates are saddled with more debt than is necessary. They could have gone to another college, and perhaps earned more.
Their conclusions come from an analysis of 7,300 of surveys looking at what US grads were making 10 years after finishing their degree. For business students and humanities majors, the study finds that prestige of the school has a major impact on future earnings expectations.
However, for STEM orientated subjects (science, technology, engineering and math), the prestige of the school often had little to no impact on the expected future salary – they largely turned out to be the same for most graduates. There was no major statistically significant differences in the average earnings of science majors from either selective schools, mid-tier schools or less selective schools. For engineering graduates results were similar, except for a marginal difference between selective and mid-tier colleges.
It is worth noting here that their research ensured that other factors which could contribute to numerous other factors that might influence earnings (such as family income, race or ethnicity, gender, marital status, SAT score, postgraduate degree and age at graduation etc).
The conclusion? It can be a waste of money to spend beyond a families means in those fields.
Furthermore, the implications of Eide and Hilmer’s findings on a graduates future are more complex than they seem.
“Students may not actually be able to get into their desired major at a prestigious school, for one thing, further undermining the value of their choice,” they write. “And some who do land their major of choice may face other concerns: It may take them longer to graduate than another major would—or they may not graduate at all, which would limit or erase the hoped-for salary advantage.”
Skills over prestige
Eide and Hilmer believe the rational behind these surprising statistics is that skills take priority over prestige in these fields. Across the board, curricula for STEM subjects tend to be largely standardised in university systems.
“There’s a commonly accepted body of knowledge students must absorb,” says the report. “So, a student may not need to attend the best possible school to ensure a good salary after graduation.”