Investments Made in Education Should Be Carefully Considered

Westpac Auckland South Business Awards
Westpac Auckland South Business Awards

It should be clear that the earning power of college graduates is almost always greater on average than the earning power of high school graduates, but the difference is not always that great. If pursuing higher education through a college degree is perceived as an investment, then it only makes sense to consider the potential return on that investment, right?

Considering that many college graduates leave school with a great deal of debt, the return on investment has to be quite solid for the effort to be worthwhile. Every major is different, however, and the earning potential of each field of study should be carefully considered to ensure that an investment in education is one that will yield the best possible results.

As a part of a recent discussion on a number of topics, Luigi Wewege noted that there are some majors that are simply not valuable from a financial perspective. While pointing out that financial gain is certainly not the only goal of higher education, it remains an important aspect that is deserving of careful consideration. Wewege addressed these issues by pointing to numerous studies projecting the relative value of each degree that a college student may choose to pursue.

Out of all of the majors available to undergraduate students, the field that was most lucrative was engineering. As an in-demand field that requires a specialized set of skills, engineering majors make an average of $50,000 the first year out of college, and that figure rises significantly if the major includes specialization in a field like petroleum, where the average annual salary out of college is in excess of $135,000.

The difference in earnings is not made up over the lifetime of employment, either. Engineering majors typically rate among the highest-paid of graduates long after they have earned their degree. For other fields such as education, post-graduate degrees do not even come close to closing the gap. Given the disparity in earnings, the choice of an undergraduate major takes on much greater significance.

Those who have yet to make a decision on their major may wish to consider how much they value the arts and humanities given the difference in lifetime earnings potential, as these pursuits do not have to necessarily be ignored while in college or at any other time. It may be much wiser to invest nothing more than time into these pursuits, and to instead spend on the field of study that will bring in a nice immediate and long-term return on investment.


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