|Photo: John F. Wasik|
As our family navigates a college selection choice for our youngest daughter, a natural question pops up: Is it worth going into debt for a college degree?"
|Photo: CBS News|
Like millions of American families, we’re averse to the idea of saddling our daughter -- or ourselves -- with debt. I’m within five years of retirement age, and we hate the idea of loans.
Years ago, we considered the idea of “return on investment” for specific degrees and colleges for our oldest daughter. Certain degrees like systems engineering, actuarial mathematics and computer science have great returns, according to PayScale, a company that tracks post-graduate salaries.
If you have a child who has the aptitude and desire to study largely technical subjects -- and will be happy in those careers -- your search is so much easier.
But what if, like most children, yours doesn’t have that precise inner direction? As a parent, you’ll then have to chart a course that’s more financially oriented than you might like.
One marker for choosing a degree is the colleges themselves. Some universities are known for the excellence of their programs, hence their graduates will have less problem finding well-paying work when they graduate. But the differences between great universities and the rest of the college universe are vast. You have to look carefully at each program.
According to a recent study by Joseph Altonji of Yale and Seth Zimmerman of the University of Chicago, college spending on programs can have a large disparity.
The most expensive program in the study was engineering, which costs colleges roughly $62,000 per student annually for specialized facilities such as labs. A business major, in contrast, cost about half as much.
Although engineering degrees tend to be the highest paying, your net return is what you paid for the degree relative to your eventual salary. By that measure, computer science still yields one of the highest returns, while philosophy and art are near the bottom.
“The importance of costs as a determinant of relative returns is even more striking on a per-dollar basis,” the researchers found.
Source: CBS News