Getting ready to choose a college?
Depending on your children and their interests, they may be looking at a report to determine the top party schools or the schools that rank highest for their chosen field.
Or, they may just care about the bottom line.
In that case, the annual PayScale report probably attracts their interest.
PayScale offers an annual college salary report that shows which colleges produce graduates that make the highest annual income. The report breaks this down by starting salary and mid-career salary. They also report how satisfied respondents are with their jobs. All the data is collected by those who self-report.
This year, schools in the top 10 are composed primarily of Ivy League schools, private schools, and schools that specialize in a field such as engineering. They are in order of ranking:
- Princeton University
- Harvey Mudd College
- California Institute of Technology
- United States Naval Academy at Annapolis
- United States Military Academy at West Point
- Massachusetts Institute of Technology
- Lehigh University
- Polytechnic Institute of New York University
- Babson College
- Stanford University
Is the School Worth the Expense?
One trait that all of the top 10 schools (and many of the schools lower on the list) have in common is that they are expensive.
The Massachusetts Institute of Technology (MIT), runs $40,732 a year for tuition and fees with an additional $11,775 for room and board. That is $52,507 a year or $210,028 for a four year education, not including yearly tuition, fees and room and board increases.
Princeton estimates the yearly cost of attendance including tuition, fees, room and board and miscellaneous expenses to be $54,780 a year.
While this expense may be largely paid by wealthy parents, for those students who do not have wealthy parents, they are looking at potentially taking out tens of thousands of dollars in student loans. Even if a student with financial need theoretically was able to get half of their expenses covered through grants, scholarships and financial aid, that student is still looking at about $100,000 in student loans after graduation. According to FinAid.com, that would leave a graduate who is on the 10 year loan repayment plan with a loan payment of almost $1,000 a month. Suddenly Princeton’s starting salary of $58,300 doesn’t look so appealing.
Compare these Ivy League and private schools’ tuition and room and board with other schools that are reputable and public.
My alma mater, the University of Michigan, costs an in-state student $12,800 to $14,450 for annual tuition and fees, and room and board runs $11,640 to $12,906 (U of M Housing). The student is looking at a yearly cost of $24,400 to $27,356 or about half that of Princeton or MIT.
While not in the top 10 or anywhere close, the University of Michigan–Ann Arbor is ranked #188 on PayScale’s list with a starting salary of $51,300. Considering many students will not be burdened with as many student loans if attending an in-state school, it may be a worthwhile consideration.
What Are Alternatives If You Can’t Afford the Top Schools?
Can’t afford a private or Ivy League school for yourself or your kids? Consider these options:
1. Choose to attend the most prestigious in-state public school you can attend.
You will save significantly over the top universities on PayScale’s list, but you will get the best education you can find in your state. According to researchers cited in the New York Times in reference to PayScale’s survey, “It’s the student who matters. Hard-working, ambitious students will do well wherever they go. The opposite applies to mediocre or lazy students.”
2. Choose your major wisely.
Some critics point out that it is not the school so much as which field the degree is earned that affects income. That is why schools like Caltech end up in the top 10. No surprise, Forbes analyzed PayScale’s data and determined that “some of the top-earning degrees for college grads are in engineering and science.”
3. Network at college.
Part of the draw to attending an Ivy League school is that graduates look out for one another and look to connect with one another, which is very useful when searching for a job. A college student should look to develop a strong network which can provide benefits for him after graduation. (And he can reciprocate by providing opportunities for others.)
While PayScale’s information is interesting to read, remember that the ambition of the student is what matters most followed closely by the student’s major. Not attending one of the top colleges does not mean that the student will be limited to a low salary or will never achieve a top salary.
Excellent points!! State universities are a great education, but don’t overlook 2 of the top 10 are military academies that pay the student to attend. Free education and they pay you to attend! Win/win! The only drawback is the 5 year military obligation when you graduate.
Rob @FinancialSprout says
What is your opinion on attending a local or satellite college? I often wonder if a more notorious school will help you more in the application process for a job. For example going to Purdue university versus a small college like Valparaiso University. Both schools are very good, but Valpo is a small private school. Do you think this makes a major difference to employers?
It is sad that the choice of major is a means to an end (money) and not an end in itself (self-improvement).