Are low-paying college majors doing more harm than good?

Michael Schramm

University of Michigan

Many students attend college hoping that their graduation will result in a higher-paying job and quality of life, but could certain majors be causing students more financial harm than good?

Based on averages, college degrees seem worth the costs. A Pew Research study revealed that the net payoff for the average public university graduate was $550,000 over the course of 40 years.

And college graduates start off earning more from the outset.

In a 2015 study, the National Association of Colleges and Employers reported that the average starting salary for the Class of 2014 is approximately $48,127. By contrast, the National Center for Education Statistics reported that high school graduates earned approximately $30,000.

But not all degrees are created equal.

Certain majors provide starting salaries similar to those for high school graduates. For instance, social work majors have a median starting pay of $32,800, early childhood education majors have a median starting pay of $29,700 and child and family studies have a median starting pay of $31,200.

With in-state public colleges costing around $23,410 annually and private colleges costing around $46,272 annually, it’s concerning that students could choose a low-paying major that isn’t financially worth the cost.

Adam Stevenson, a University of Michigan educational economics professor, says that education is an investment -- an asset that people pay time and money for to further their financial health. He says that students attending low-quality colleges with high costs and low-paying degrees could be making an investment that is not worth the costs.

“There’s people who make, you know, what an economist might call an ‘irrational choice’ because of the cost-benefit of the debt load versus the expected benefits.”

And the average cost of college isn’t remaining stagnant. Both public and private school costs are rising higher than inflation — the average yearly increase in prices — and it’s possible that more low-paying majors could become a poor investment.

If an increasing mass of students took on debts higher than their value, Stevenson believes there could be financial ramifications for both borrowers and lenders.

“If there are enough people who are choosing educational options where the costs are greater than the benefits, and those costs are debt repayments and interest rate repayments, yeah, I mean, you’re gonna see more and more defaults,” he says. “Lenders aren’t getting paid back. They’re gonna need to make choices about, you know, who to borrow from or lend to in the future.”

Stevenson adds that these costs could harm borrowers, who would have difficulty taking out a loan after defaulting.

Another potential concern is that student loans could create a debt bubble — an asset with a higher price than its actual worth.

According to Business Insider, this would eventually cause tuition prices to fall and force lending policies to become stricter. If this happened, many low and middle-income students would suffer, being unable to borrow to afford college.

But Stevenson isn’t sure that we aren’t already in a college debt bubble.

While some students are paying more for their degree than it’s worth, a larger majority of students are pursuing degrees that far outweigh the costs.

“The straight monetary benefits of college are so huge that the typical debt burden taken by the typical student is nowhere near the market value.”

Other writers have echoed Stevenson’s position.

Still, Stevenson says that bubbles are inherently difficult to recognize, making it impossible to know for sure whether or not a student debt bubble exists.

“The reason why bubbles are bubbles is that they’re hard to see when you’re in the middle of them.”

While a major’s financial net worth is noteworthy, not all students are concerned with costs.

Cassie Schieltz, an out-of-state student and rising senior at the University of Michigan, opted to study sociology.

Schieltz says that she didn’t consider the financial costs or return on investment when considering her major because she “believed that money should not be the driving force in what I want to study.”

“I chose sociology simply based on that I liked the course material and I knew that I would probably attend grad school.”

The average starting salary for a sociology major at the University of Michigan is $36,732, with estimated out-of-state tuition costs of $60,484.

Schieltz plans on pursuing a master’s degree in urban planning. This would provide her an average starting salary of $51,100, though she will pay additional tuition for a Master’s program.

From her personal experience, Schieltz believes that students coming from better financial backgrounds are less concerned with financial costs.

“People who don’t have the money to go to grad school or want a job that will provide them with a stable, worry-free life do choose majors based on [financial benefit]. So, I think the more financially stable someone is the less they consider finances when choosing a major.”

Michael Schramm is a University of Michigan junior, majoring in economics and English. Interested in a writing career, he produces a biweekly column for the Michigan Daily and writes for his college’s economic newsletter. You can follow him on twitter at @MTSchramm.

This story originally appeared on the USA TODAY College blog, a news source produced for college students by student journalists. The blog closed in September of 2017.

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