Latest news with #JaisonAbel
Business Insider
10-07-2025
- Business
- Business Insider
19 college majors where the typical graduate is making at least $100,000 by the middle of their careers
It turns out that picking a college major that will pay off after graduation actually is rocket science. A New York Fed analysis of 2023 American Community Survey data found that college graduates who majored in one of 19 areas of study had a median mid-career wage of at least $100,000 a year. The New York Fed defined mid-career as people between the ages of 35 and 45. The analysis of 73 majors and groups of study only included people with a bachelor's degree — no additional graduate school education — and used what's noted as people's first major. One general area of study accounted for 10 of the 19 spots: engineering. Aerospace engineering majors had the top median mid-career wage of $125,000, per the analysis. Three other engineering fields followed behind — computer, chemical, and electrical. Jaison Abel, the head of microeconomics at the New York Fed, told Business Insider that engineering is a great example of the type of college major that has the quantitative skills businesses tend to want. "There is a bit of a premium on the demand side, and also these are relatively challenging majors to get through," Abel said. "When you've got quite a bit of demand for the skills and not as much supply of the types of people who are coming in, that's going to make wages overall go up and be high." Computer science, economics, and finance were the three non-engineering majors with the highest mid-career median wages. Across all the majors analyzed, the median mid-career wage was $83,000 a year. While the prospect of high mid-career earnings is likely attractive to many students, this appeal hinges on actually landing a job in their field of study — a feat that has become increasingly difficult for some college graduates. A New York Fed analysis of unemployment data showed 5.8% of recent college graduates in the labor force between the ages of 22 and 27 were unemployed in March, up from 3.9% in October 2022. Absent the pandemic-related spike and its recovery over the next year, that's the highest rate since 2013. Student loans and the cost of college may affect how a degree is valued As college tuition rates have risen in recent decades, many Americans have taken on a considerable amount of student debt. In 2024 dollars, the average price for tuition and fees at private nonprofit, four-year schools has increased 30% from the 2004-05 academic year to $43,350 for the 2024-25 academic year. Public, four-year in-state schools are much cheaper, but their average cost has also climbed during that timeframe. Housing and food expenses make the cost of school even higher. The average American consumer with student loans had a debt balance of about $35,000 as of the third quarter of last year, per Experian data. That's a decline from the average in the third quarter of 2023. This changing landscape has caused some people to question whether college is a worthwhile investment. In response to these concerns, some high school graduates have gone straight to the workforce, while others have opted for alternative paths, like community college or trade schools. Not all job openings require someone to have a particular level of education. However, sometimes a college degree is preferred for a job seeker. Automaker Stellantis said in a previous statement that "most non-bargaining unit positions (salaried) require an associate's or bachelor's degree," but also noted that "for some positions, a degree might be a preferred qualification which would open those up to people who can demonstrate proficiency in other ways." College graduates who majored in early childhood education had the lowest median mid-career wage, at $49,000 a year. Other types of education majors had relatively low mid-career median wages, such as secondary education.
Yahoo
29-04-2025
- Business
- Yahoo
When is going to college not worth the money?
Getting a college education has traditionally been seen as a way to move up the economic ladder. But an analysis by economists at the Federal Reserve Bank of New York shows that the cost of a degree may not always be worth it. The value of a college education has increasingly come into question in recent years, especially as tuition costs steadily climb and millions of Americans grapple with student loans. As a result, only one in four U.S. adults say it's extremely or very important to have a four-year college degree to get a well-paying job, according to a 2024 Pew Research poll. To be sure, the case for attending college remains strong. Another study by the New York Fed found that in recent years the typical college graduate with a bachelor's degree had annual income of roughly $80,000, versus $47,000 for people with only a high school diploma —a 68% premium. Yet a recent study by the Fed bank suggests a college degree hasn't paid off for at least 25% of college graduates in recent decades. Of course, not everyone goes to college chiefly to earn a high income — education can be its own reward, after all. But how you navigate your college career — or whether you choose to attend at all — is among the most important financial decisions a person will make. Here's when a diploma may not deliver much of a bang for the buck. When might a college degree not be worth it? Not surprisingly, the more a student must spend on out-of-pocket expenses, the lower their typical return on investment. The average college student pays about $30,000 out of pocket for four years of college, according to the New York Fed study. However, students could face significantly higher costs if they choose to live on campus, or if they miss out on financial aid and are forced to pay a school's full price. The typical college graduate sees a return on investment (ROI) of roughly 12.5% according to the New York Fed. That rate has remained mostly unchanged over the past three decades, and still exceeds the returns on most other investments, including the stock market, which over time offers long-term return of about 8%. Despite that payoff, certain factors can lower a college grad's ROI. For example, the researchers found that living on campus increased the price tag for college by nearly $30,000 – from $180,000 to $207,000 – reducing the return on investment to about 11%. The 1.5% drop in ROI may seem nominal, but it can translate to hundreds of thousands in lost dollars. "This extra cost and the associated return are comparable to attending a more expensive school that is roughly twice the average price," the researchers, economists Jaison Abel and Richard Deitz, said in the study. Among college graduates, 25% actually see little return on investment. This group was making less than $10,000 more in income than the median high school graduate in 2024. Their rate of return was only 2.6% compared to the average of 12.5% — meaning they see much less of a payoff. Another factor that can reduce the value of a college degree is how long it takes to obtain. The typical bachelor's program runs for four years, but in some cases students might extend the timeline if they haven't completed their course load. That can have major financial implications. Taking an extra one to two years to get your degree adds "considerably to the cost," the New York Fed found. There's the direct cost students have to pay for the additional tuition, but also higher "opportunity costs" — for example, a student who starts their career later misses out on years of working experience and can end up earning less over their lifetime. "All in all, we estimate that taking five years to complete college pushes the median rate of return down to about 9% and taking six years pushes it down to 7%," the researchers found. Graduating in five years, rather than four, pushes up the total cost of college from $180,000 to $272,000, while taking six years would cost $364,000. How much does a student's major matter? Another important consideration in deciding if going to college is a sound investment is a student's major. After all, certain fields tend to lead to higher incomes. So-called STEM majors tend to earn the most, both in the early and mid-stages off their career, according to New York Fed data. For instance, a computer engineering major stands to make a median wage of $122,000 mid-career, versus $55,000 for an education major, according to the bank's data. Among the fields of study with the highest returns are engineering, business and health sciences. The return is lowest for those majoring in fine arts, liberal arts, leisure, and hospitality and education, which ranked last. "While some of it may come down to choices people make for the jobs they wish to have, one significant consideration is college major, something over which students have direct control," Abel and Dietz wrote. The life of teen idol Bobby Darin Bill Belichick on a life in football Pope Francis laid to rest Sign in to access your portfolio
CBS News
28-04-2025
- Business
- CBS News
When is going to college not worth the money?
Getting a college education has traditionally been seen as a way to move up the economic ladder. But an analysis by economists at the Federal Reserve Bank of New York shows that the cost of a degree may not always be worth it. The value of a college education has increasingly come into question in recent years, especially as tuition costs steadily climb and millions of Americans grapple with student loans. As a result, only one in four U.S. adults say it's extremely or very important to have a four-year college degree to get a well-paying job, according to a 2024 Pew Research poll. To be sure, the case for attending college remains strong. Another study by the New York Fed found that in recent years the typical college graduate with a bachelor's degree had annual income of roughly $80,000, versus $47,000 for people with only a high school diploma —a 68% premium. Yet a recent study by the Fed bank suggests a college degree hasn't paid off for at least 25% of college graduates in recent decades. Of course, not everyone goes to college chiefly to earn a high income — education can be its own reward, after all. But how you navigate your college career — or whether you choose to attend at all — is among the most important financial decisions a person will make. Here's when a diploma may not deliver much of a bang for the buck. When might a college degree not be worth it? Not surprisingly, the more a student must spend on out-of-pocket expenses, the lower their typical return on investment. The average college student pays about $30,000 out of pocket for four years of college, according to the New York Fed study. However, students could face significantly higher costs if they choose to live on campus, or if they miss out on financial aid and are forced to pay a school's full price. The typical college graduate sees a return on investment (ROI) of roughly 12.5% according to the New York Fed. That rate has remained mostly unchanged over the past three decades, and still exceeds the returns on most other investments, including the stock market, which over time offers long-term return of about 8%. Despite that payoff, certain factors can lower a college grad's ROI. For example, the researchers found that living on campus increased the price tag for college by nearly $30,000 – from $180,000 to $207,000 – reducing the return on investment to about 11%. The 1.5% drop in ROI may seem nominal, but it can translate to hundreds of thousands in lost dollars. "This extra cost and the associated return are comparable to attending a more expensive school that is roughly twice the average price," the researchers, economists Jaison Abel and Richard Deitz, said in the study. Among college graduates, 25% actually see little return on investment. This group was making less than $10,000 more in income than the median high school graduate in 2024. Their rate of return was only 2.6% compared to the average of 12.5% — meaning they see much less of a payoff. Another factor that can reduce the value of a college degree is how long it takes to obtain. The typical bachelor's program runs for four years, but in some cases students might extend the timeline if they haven't completed their course load. That can have major financial implications. Taking an extra one to two years to get your degree adds "considerably to the cost," the New York Fed found. There's the direct cost students have to pay for the additional tuition, but also higher "opportunity costs" — for example, a student who starts their career later misses out on years of working experience and can end up earning less over their lifetime. "All in all, we estimate that taking five years to complete college pushes the median rate of return down to about 9% and taking six years pushes it down to 7%," the researchers found. Graduating in five years, rather than four, pushes up the total cost of college from $180,000 to $272,000, while taking six years would cost $364,000. How much does a student's major matter? Another important consideration in deciding if going to college is a sound investment is a student's major. After all, certain fields tend to lead to higher incomes. So-called STEM majors tend to earn the most, both in the early and mid-stages off their career, according to New York Fed data. For instance, a computer engineering major stands to make a median wage of $122,000 mid-career, versus $55,000 for an education major, according to the bank's data. Among the fields of study with the highest returns are engineering, business and health sciences. The return is lowest for those majoring in fine arts, liberal arts, leisure, and hospitality and education, which ranked last. "While some of it may come down to choices people make for the jobs they wish to have, one significant consideration is college major, something over which students have direct control," Abel and Dietz wrote.
