10062011_Harvard1_articleBeth Braverman’s “Controversial College Rankings a Huge Influence,” recently published in The Fiscal Times, asserts what is becoming the new conventional wisdom about getting a college degree: a college education needs to be understood as an economic investment, and the most common ranking measures don’t take that into account. The main concern here is “return on investment,” often abbreviated as ROI, which is a comparison of the cost of your college degree to your degree’s future earning power.  For example, spending $175,000 on a degree that will only gain you employment in fields that may never pay more than about $65,000 or $70,000 per year at the end of your career may not be a wise idea: if your degree carries with it lower income potential, then you want to avoid high debt in attaining it.

I think these are good insights and need to factor in to student decision making about college attendance. However, reasoning about this subject tends to miss a few vital questions that I think are necessary to advance the discussion. Braverman’s article closes with the following: “‘A petroleum engineering major is going to make a lot more money than a psych major without a graduate degree, no matter what school you go to,’ Carnevale says.” Carnevale chose petroleum engineering as an example of a high paying degree for a reason: it’s listed as the number one paying major by ThinkAdvisor. In fact, among the highest paying majors, thirteen of the top sixteen majors, and all of the top eleven, have the word “engineering” in it. Of the top twenty majors in terms of income potential, engineering dominates the list.

The National Center for Education Statistics reports that as of 2009-2010 only about 1% of all bachelor degrees conferred were in engineering. What are most college students pursuing? According to the NCES, “Of the 1,650,000 bachelor’s degrees conferred in 2009–10, the greatest numbers of degrees were conferred in the fields of business (358,000); social sciences and history (173,000); health professions and related programs (130,000); and education (101,000).” Of course the high pay in engineering fields very likely reflects in part an underproduction of graduates in these fields: if there were more engineering graduates than engineering jobs, then average pay would go down, and if there were more engineering graduates than jobs persistently for year after year, pay would eventually bottom out.

But now we get to the really hard question: how many of those business, social science, health profession, and education majors are both interested in and able to become engineers? Telling everyone that it’s smarter financially to go into engineering than to go into social work is almost too obvious to need saying, but how many people interested in social work have the disposition and ability to become engineers?  You could ask the question the other way too: how many engineers have the disposition and ability to become effective social workers or high school teachers?

Telling people to pick a higher paying major isn’t enough. If you’re not the type of person who can or will go into engineering or computer science, how do you make a living with your bachelor’s degree? Which and what kind of graduate degrees pay best is another question to pursue, but it generally follows the same patterns. The reality is not that some jobs are inherently better or worth more than others. The reality is that — by mere accidents of history — some skill and interest sets come with more consistent financial rewards than others.  Any skill or interest set could conceivably lead someone to make millions (look at the number of successful actors, directors, and producers who were English majors), but the question at hand here is the statistically most consistent likelihood of a financial return on your college degree. If you happen to be the engineering type, as things are working out now, you’re in good shape.

The next claim made by the new conventional wisdom is that the name brand of the degree doesn’t matter as much as what field the degree is in, but again, I think this claim stops one step short of fully thinking through the problem. If you have a degree in petroleum engineering, you won’t be competing with Harvard English majors for jobs. You’ll be competing with other petroleum engineering majors. Does name brand on the degree matter among petroleum majors? Are there schools that have better reputations and land their graduates more jobs than other schools within this specific field? If 22% of all graduates in 2009-2010 were Business majors, what influences employers to pick one business school graduate over another?

Braverman’s article cites internships and work experience after choice of major as the most important factors, but if an employer has narrowed down a job search to ten candidates with the same kind of degree and equally compelling experience, what do you think will matter next? Suppose the employer then narrowed his or her choice down to the top three who were the best fit and gave the best interviews? What matters next? It’s a bit ridiculous, I think, to say that name brand on a degree does not matter. I think the question is about when and where and how a college’s name recognition matters.

So here is my advice to those of you currently in the process of choosing a college: don’t think about what college you want to attend first. Think about what major you want to pursue, or perhaps what group of majors you might want to pursue. Among those majors, compare the cost of attaining the degree to your likely income, and then select

  • the highest ranked college
  • in that area of study
  • that you can afford with minimal debt

What if you’re undecided, as most of us are upon graduating high school? What if you really have no idea what major you want to pursue? If you’re a strong student, then get into the best college (generally) that you can afford with minimal debt. If you’re a weak to average student, you might want to consider a good community college, especially if you plan to transfer those credits in-state. Attending a community college will keep your costs down and give you a range of course options and institutional support that will help you choose a major.

It might help for you to get to know yourself a little bit too.