It's no secret: College is expensive.
Nationally, student loan debt stands at $914 billion, up $10 billion from just three months prior, according to the latest quarterly report from the Federal Reserve Bank of New York.
Despite the gloom and doom over the rising cost of college, it still pays to get a degree if you do it wisely. Full-time workers with a bachelor's degree earn, on average, 84 percent more over their lifetime than those with only a high school diploma, according to a May 2011 report by the Center on Education and the Workforce at Georgetown University.
[See the 2013 Best Colleges rankings.]
But college is an investment, and not all investments are created equal. What you study impacts the economic value your degree will hold after graduation, which is why some parents urge their students to study business instead of poetry.
In fact, 42 percent of parents say they prodded their student to pick a collegiate path based on earning potential, and 16 percent of parents say they will have their child change majors to earn more money, according to Fidelity Investments, which surveyed nearly 2,400 families for its August 2012 report.
Which majors are parents pushing their kids to pursue? Computer science, nursing, engineering, psychology, biology, and accounting, the Fidelity report states.
While engineering and computer science consistently rate among the top-paying college majors, students should also research employment demand and hot skillsets, says Andrea Porter, communications director at Georgetown's CEW.
Those skills include the ability to analyze and make sense of data, work through economic models, or understand what drives people to buy. Factoring in workforce demand, employment potential, starting salaries, and income growth can help college students ensure they get the best return on their investment.
An analytical edge
Engineering, physics, computer science, and mathematics boast strong earning potential and low unemployment rates, which can help you reap the highest return on your education investment, says Katie Bardaro, a lead economist at PayScale, an online salary database.
"Not everyone is cut out for the analytical stuff. If you are one of those people, you're lucky, because people want to hire you," Bardaro says.
With average starting salaries hovering close to $98,000 per year, a median salary of $120,000, and 95 percent of graduates employed full time, petroleum engineering majors can expect a solid return on their degree, according to PayScale salary data and a report by the CEW. The same goes for students majoring in geological engineering, a niche degree that yields high salaries and nearly 100 percent employment for majors, the CEW report says.
[View a slideshow featuring nine hot college majors.]
Engineering majors dominate most top 10 lists for degrees with a high return on investment. Here's how other engineering degrees stack up in order of median mid-career pay, according to earnings data from PayScale:
-- Chemical engineering--median starting pay: $64,500; median mid-career pay: $109,000
-- Electrical engineering--median starting pay: $61,300; median mid-career pay: $103,000
-- Materials science and engineering--median starting pay: $60,400; median mid-career pay: $103,000
-- Aerospace engineering--median starting pay: $60,700; median mid-career pay: $102,000
-- Computer engineering--median starting pay: $61,800; median mid-career pay: $101,000
Long-term earning
Parents urging their students to change majors for a higher payout anticipate their child will earn more than $70,000 per year after graduation, but the average starting salary for college graduates in 2012 was less than $44,500, according to the Fidelity survey.
But students and parents should consider the lifetime earning potential of a given major when trying to determine its return on investment.
"[In] nursing, you get paid really well in the beginning, but then you just don't grow much in your career," says PayScale's Bardaro.
Graduates with degrees in physics, economics, or statistics often enter the workforce with lower initial salaries, but the potential for income growth and the flexible skillset makes these degrees solid investments, Bardaro says.
Physics lands among the top 10 majors for median pay and for growth between mid- and long-term career salaries. The same is true for economics majors, she points out.
"A lot of people talk about majoring in business ... actually, economics is even better, because you learn a lot more quantitative analysis, a lot more statistics, and things that are applicable in kind of this big data world," she says. "Similar to physics, it's really good for salary growth overall."
Here's what starting and mid-career salaries look like for these majors, according to salary data from PayScale:
-- Physics--median starting pay: $49,800; median mid-career pay: $101,000
-- Economics--median starting pay: $47,300; median mid-career pay: $94,700
-- Statistics--median starting pay: $49,000; median mid-career pay: $93,800
Value-added skills
Majoring in a STEM subject--science, technology, engineering, and math--is not for everyone. Students working toward degrees in the humanities and social sciences can still get a strong return on their investments.
"Whether it be sociology, or political science, or anthropology ... anything that helps you understand people's behaviors and trends in behaviors, I think those would be good majors for people who aren't as analytically focused," Bardaro says.
While the salaries for these majors are lower than those for economics or engineering degrees, students can still earn strong salaries and have the versatility to work across multiple industries. Here's what starting and median salaries look like for students graduating with certain bachelor's degrees in the social sciences:
-- Government--median starting pay: $41,400; median mid-career pay: $87,300
-- Political science--median starting pay: $39,900; median mid-career pay: $80,100
-- International relations--median starting pay: $40,500; median mid-career pay: $79,400
-- Advertising--median starting pay: $37,700; median mid-career pay: $74,700
Students with the elusive combination of communications and technical skills are also in high demand, Porter, with CEW, says.
[Learn which careers to watch in 2012.]
"Research what skills are most valuable in the labor market ?... and depending on those 'hot skills' you can also obtain a certificate that will provide you skills that will set you apart," Porter adds.
Relevant certifications, concentration areas, and minors can all add value to your degree. Choosing schools wisely can also help students get the best return on their investments, says PayScale's Bardaro.
"If you're in one of the STEM majors ... you can justify going to a more expensive school because they pay better and there's more job opportunities," she says, noting that attending a top-tier school such as Stanford University or the Massachusetts Institute of Technology can add more value to certain degrees. "If you have more interest in art or humanities ... then you should probably think about going to a cheaper school."
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