Going to college is a wonderful life experience. However, it’s also expensive. In order for this experience to be worth its cost, it is important to be able to use your degree after you graduate. Unfortunately, there are a lot of college degrees that just don’t offer a good return on investment (ROI). You spend a lot of money getting them, and then either there aren’t jobs available in the field, or there are jobs but they don’t pay very well.
College Degrees
College degrees with a poor ROI
Be aware that this is a common problem for people who get the following college degrees:
- Culinary degree. OnlineDegrees reports that you can do almost every job a trained chef can do without getting a degree in the culinary arts, resulting in a very poor ROI for this degree.
- Social Work. This is a really wonderful field for people who want to work hard helping others in need. Unfortunately, it’s a field that doesn’t pay very well. WalletPop reports that the average starting salary is less than $33,000 and only climbs to slightly more than $41,000 by mid-career.
- Child and Family Studies. This specific degree pays even less than the broader degree in social work. Yahoo! Finance reports that the starting pay for this degree in 2010 was less than $30,000 per year and by mid-career you’re still earning less than $40,000 annually.
- Management. You can actually earn a lot of money in certain management positions. However, you can earn that income without getting a college degree so choosing to get a degree in management is a waste of your money. Wealth Pilgrim reports that storage and distribution managers, transportation managers and non-retail sales managers are among the top high-income jobs that don’t require a college degree.
- Criminal Justice. This is another degree that doesn’t have a good ROI in large part because you can earn a good income in many of its related fields without spending four years (and a fortune) in college. Wealth Pilgrim’s article notes that some of the high-earning jobs in this field that don’t require a degree are police ID and records officer, police detective, criminal investigator, special agent and investigator in child support, missing persons and insurance fraud cases.
- Liberal Arts. This degree simply doesn’t have a lot of value in the real world. One person in the Motley Fool community reports that her undergrad liberal arts degree cost her about $17000 in school loans but only increased her annual pay by ~$2000. The situation is obviously worse for people who pay significantly more for their liberal arts degrees (which is unfortunately common since private colleges are popular among liberal arts majors). Plus you have to think about what work you’ll be doing with this degree. OnlineDegrees says that the best salary for people with liberal arts degrees comes if they work as funeral directors! Incidentally, you don’t even need a degree to become a funeral director.
- Horticulture. The four years that you spend getting a degree in this field of plant sciences isn’t likely to result in a high salary. By mid-career you’ll still be earning less than $54,000 annually according to a WalletPop report. And that assumes that you’ll even be able to find a job as a horticulturist!
- Real Estate. The real estate market has taken a huge hit in recent years. Even though the market will rise again eventually, it doesn’t make sense to invest in a college degree in this field. That’s because in a good market you can earn a high wage in this field without getting a college degree according to Christian Personal Finance.
Factors affecting the value of your degree
Note that there are many factors that can affect the true ROI of your college degree. Some of those factors include:
- The level of your degree. Although it costs more to get a graduate degree, the ROI can jump considerably in some fields for people who invest in this higher education.
- The cost of your school’s tuition. The ROI for a degree in some fields is a lot higher for people who pay low costs at a state school in comparison with the high price of a private college education. This depends, though, because the value of a name brand education is worth something in some fields.
- How much you actually pay for college. If you are able to get a significant number of scholarships and therefore don’t pay a lot for college, then it’s a lot easier to get a good ROI on your degree.
Do you feel like you are getting a good ROI on your college degree?
Kathryn,
Interesting at first glance, but I would challenge two of these:
Culinary – Many of the top chefs have graduated from acclaimed Culinary schools such as the Culinary Institute of America. In those cases, I am sure they would credit their education to much of their success. The data that you link to lists advanced degrees such as Masters & Professional which are very rare in the Culinary field. I also found it interesting that they link to a culinary education site which sends a mixed signal.
Social Work – It really depends on what you want to do with the degree. If your goal is to be a Therapist (as my wife is), you can leverage this degree to get licensed and actually bill insurance companies, thus making a great living as a Therapist. You generally do need a Masters Level degree, but it can be a great gateway to the Counseling Profession in which you can earn a very good income with a flexible schedule.
I do believe that “corporate America” still loves degrees and therefore gives certain advancement opportunities to those with degrees when judged against those who do not have them.
On the topic of real estate, I agree wholeheartedly. If one wants to earn a good living in real estate, the opportunities are sales and development which certainly do not require degrees. If one wants a higher education in real estate, I would recommend a law degree to practice real estate law.
~ Anthony
So your research about the value of a liberal arts degree consists of “One person in the Motley Fool community reports that her undergrad liberal arts degree cost her about $17000 in school loans but only increased her annual pay by ~$2000.”
My daughter has a liberal arts degree and makes more than $200k a year. So that cancels out your anecdote, and is just about as useful.
@bigyaz obviously both cases are somewhat of an extreme example. One can make the argument that some high school graduates make millions, however that is not to generalize and say all high school graduates can become millionaires. I think what Kathryn is getting at is that in general liberal arts graduates have a significantly lower income compared to say finance graduates.
http://www.onlinedegrees.org/calculator/degrees/liberal-arts
http://www.payscale.com/research/US/Degree=Liberal_Arts/Salary/by_Job
Another important thing to take into account is the two or four years that will take you to get those degrees. That just leaves you 2-4 years behind. So, not only are you left with a huge debt after school but you also lost 2 years of earning opportunity.
just because a lot of jobs don’t technically require a degree doesn’t mean getting one in that field is completely useless and a waste of money. oftentimes a recruiter will value those with a degree higher then those without: it proves you have a minimum level of knowledge about the field and the perseverance to stay with something for 4 years.
the time that a college-education was almost guaranteed to land you a high-paying job is however long over.
so you should only get a degree in a field you are actually interested in. if your only goal of getting a degree is ‘proving how smart you are’ (liberal arts degrees are famous for this) then recruiters might be more impressed by 4 extra years of job-experience.