Most profitable college majors

Here is an article about the most profitable college majors. It is good to see this kind of material discussed in the media because it is so rare. The general media and our politicians think and communicate that any college education is a worthwhile education.

But two things are not discussed. First, it matters whether one majors in engineering or in ethnomusicology. The first one lands the college graduate plenty of job offers at a good wage. The ethnomusicology graduate ends up waiting endlessly for a job offer that never arrives.

But this is only part of the cost versus benefit discussion that needs to be heard. If one is accepted at Harvard but instead decides to attend San Jose State to study electrical engineering, their career prospects are just as strong according to the data. In other words, historically the actual learning and characteristics of the college student are what matter - not the brand-name of the college. A graduate with an IQ of 120 and a degree in Mechanical Engineering from University of Arizona is going to do pretty well - far better in fact than a student with an IQ of 120 and a degree in Sociology from Harvard. The Arizona all-in cost is perhaps $80,000 versus over $200,000 at Harvard.

But the biggest waste is when one spends $200,000 on an obscure degree from Harvard that is not in demand. Then you have the worst value - a high cost for a degree with little value.

Just because someone else is paying for the college education (your parents, a scholarship or the government) does not mean that this opportunity should be wasted. The atmosphere and friends developed at college are great but they are secondary to the job of creating graduates that are in demand.

College Grads Outlook is Grim

A college degree does not guarantee a job. Especially if the degree is in Ethnomusicology or Gender Studies. In fact in these two cases, a prospective employer may say - "Are you kidding me, do you have any common sense at all?"

The prospects for college grads are generally bad, but if your degree is ins Sociology - you are looking ahead at several miles of bad road. If you have a degree in Chemical Engineering, your prospects are far brighter.

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Butler State Dance versus Michigan State Engineering

With Butler’s just concluded 52-50 defeat of Michigan State in the NCAA Men’s basketball semifinals , let’s run though the semi finals for a practical college education. Cost matters and your field of study matters. The worst combination is an expensive college with a useless major. The best combination is an inexpensive college with a practical major. By useless we mean one that will not help you get a job and by practical we mean one that is likely to land you a good paying job.

Butler University will run a student (but more probably his or her creditors and parents) about $41,500 a year where a Michigan resident can attend Michigan State for about $19,000 annually.

At Butler there are some useful majors like Accounting, Actuarial Science, and Biomedical Engineering. But it has a long-list of majors that will result in a graduate flipping burgers and wondering what he really accomplished with his college education. From Anthropology, Classical Studies, Gender Studies, Philosophy, Sociology, to Urban Affairs , these degrees will almost universally land you in the poor house.

Michigan State also has its share of useless degrees from Anthropology, Art Education, Music Composition, English, to Jazz Studies. Or a student could buck up and take a tougher major like Material Science, Electrical Engineering or Chemical Engineering.

Again, cost matters and the field of study matters even more. Not all college is created equally.

We need people that can actually do things!

“Would it be a waste of education for someone that graduates from Yale for example to become a plumber an electrician or a bricklayer? We need people that can actually do things! We have too many bosses and too few workers. More college graduates ought to become plumbers or electricians, then go home and read Shakespeare. “ Andy Rooney on 60 Minutes March 21, 2010

And how about this for an idea? How about fewer folks attending college altogether. And while we are at it, if they do attend college then let’s have them study science, engineering, logic, statistics, accounting and business so they can actually get a job when they graduate. And let’s insist they graduate in four years. And if nobody that is graduating with a specific degree from a university (say Ethnomusicology from UC Berkeley) then lets shout this from the rooftops so the next smuck doesn’t spend all of that money (much of it from taxpayers) to study things that do not create jobs.

The $550,000 student debt

WSJ article - the $550,000 student loan. Yes it can happen and this woman at least became a medical doctor in the process.

But what is even worse is when a college student goes into debt of $100,000 and ends up with a degree in Ethnomusicology trying to pay the loan off while working at Taco Bell.

It all starts with the college admin departments calling their service “Financial Aid”. This is akin to the loan shark calling his loans “aid” or the bank calling your car loan “car aid”. Granted college students do receive some scholarships and grants that are not debt but much of the “aid” is debt that will radically reduce the options of the borrowers and their families when it is time to pay the piper.

College loans are the closest thing we have in America to debtors prison. These loans can serve a purpose if they are small relative to the future earnings but when the education is wasted and the amount borrowed is far out of proportion to the future earnings, they are big trouble. And this article indicates that almost $300 billion of these federally insured debts are non-performing so yet another federal guarantee that US taxpayers will be paying for.

College grads are less apt to smoke than non college grads

This is a good article but it misses a couple of points. When kids go into college debt it is frequently a “forever loan”. It is not dischargeable in bankruptcy. Folks all over the country are walking away from the home loans and giving the homes back to the lender and most of the time they don’t owe any more money on the loan. Even if the bank went after the home buyer for the difference between what was owed on the loan and the cash collected at the foreclosure auction, this difference is generally dischargeable in bankruptcy.

This article makes a point that it matters what one spends on a college education matters. Some folks are spending over $200,000 on a college education – and this is a much harder nut to justify than a $40,000 college education.

But this article like most others really misses the concept of correlation versus causation. It turns out that college graduates smoke less than non college grads. But was it the college experience that made the life style difference or a higher IQ or some other factor? Were those that chose college to begin with less apt to smoke than those that did not choose college. This is a silly argument for college without having far more data.

The author points out that the number of people over 25 with college degrees in the US has risen from 24% in 1998 to 29% in 2008. So supply and demand alone would make the college degree less valuable than in prior decades.

But the main point this article misses is that it matters what kind of degree one acquires. A bachelor’s degree in English Literature will likely land you a job at Sonic Burgers but a degree in Electrical Engineering or Biomedical Sciences is far more liable to land a good paying job right out of college. I don’t have the data but I strongly suspect that the number of college students studying in fields where there is a demand by employers is shrinking rather than growing. And when one spends $200,000 and ends up $100,000 in debt after six years of college the job at Sonic Burger does not usually generate enough to pay big student loans off.

What's a Degree Worth?

Wall Street Journal Article “What’s a Degree Really Worth?”

At least one member in the main stream media is questioning the assumption about the assumed value of a college education. But again this article does not go nearly far enough.

Just because there is a correlation between past college and higher salaries does not mean that one causes the other. Most of the media needs to study logic and statistics so they can understand the difference between correlation and causation. The data clearly shows that individuals accepted to an expensive elite school like Yale or Harvard that then choose to go to a less expensive state college or university do just as well financially as if they had graduated from the more expensive university.

What I have not seen is the data on financial success for those with the same IQ, and socio-economic background that have graduated from college versus those that did not attend college.

And most importantly the term “college” lumps all of these educations together at just the wrong time. It matters if the student studies a subject that is in demand (like engineering, science and accounting) or takes a “fun” subject like Sociology, Medieval German or Ethno-Musicology.