Buried in a recently released report by the Federal Reserve titled Economic Well-Being of US Households is some interesting data on college majors. In particular, it considers whether grads feel like they got their money’s worth out of their college. Guess which majors student loan debtors said are worth the least? Read on and see.
President Obama drew some heat this January when he gave Art History majors a diss by saying they’d be better off learning a skilled trade. He later apologized, but he may not have been wrong about the dim earning opportunities these majors represent. No doubt you can get a quality education in humanities, but isn’t the point of college to get a job that pays enough for you to be self-sufficient and participate in society/economy? You don’t have to be rolling in dough, but being able to pay your student loans and support yourself seems like a baseline goal to keep in mind.
What’s interesting is that some articles that have considered this study say this it proves Obama wrong, but that’s not how we read the data. The study asked those with student loans to rate their majors in one of three ways: (1) benefits outweigh costs (2) about the same and (3) costs outweigh benefits. We have no skin in this game, by the way, but are just pointing out how the study is being twisted by some.
Here’s the table in full from the Federal Reserve study – we recreated it below exactly because the published paper only offers a lo-res version that would be hard to read here. Click the link in paragraph one and scroll to page 22 to see it there. Here’s the question and the results:
Overall, how would you say the lifetime financial benefits of your most recent educational program compare to the lifetime financial cost to you of this education?
It’s interesting that the results aren’t ordered in any way that I can discern. To make it easier to evaluate, below we ordered it by the first category “benefits outweigh costs” from most to least satisfied. You can see that engineering majors feel like they got great bang for their buck followed by life sciences, health and vo-tech majors. Humanities, social science and computer science are the bottom three (ignoring undeclared).
Now let’s look at the data sorted by the “about the same” category. This shows who didn’t feel like they got the best or worst deal, but a fair trade on what they’re earning versus what they spent. Social science, IS and computer science, business and education top the tit for tat category. Humanities again is at the bottom which means that these majors are strongly divided on cost versus benefit and eschew the gray area.
Finally, let’s take a look at the Federal Reserve’s stats sorted by the last category “costs outweigh benefits.” By my reckoning, this is the category for those least satisfied with their educational ROI. Undeclared is at the top but, as these are people that didn’t graduate, we can dismiss them for this discussion. They would likely feel differently if they had a degree they could leverage. Here’s where you see the harsh reality for many humanities majors – nearly 52% don’t feel like they got decent ROI. Math/physical science and computer/IS majors were next followed by law.
Most of us have heard the line “There are three kinds of lies: Lies, damned lies and statistics.” Watching some news sites bend these stats to suit their thesis calls this to mind. Granted only 560 student loan debtors were interviewed, but it seems pretty clear that some majors offer better ROI than others when debt versus income is the sole criteria being weighed.
This is something to consider when choosing your major and making student loan borrowing decisions. No matter what your major or debt, sign up for Tuition.io’s free student loan tool to keep track of your debt and deal with it more effectively. Also read our blog often for news, money advice and other fun and informative material.