Quiz | October 2012
Will Your College Degree Pay Off?
Back in the good old days, a college degree pretty much guaranteed a job, a decent income and a shot at upward mobility. Today, eight in ten young retail workers have bachelor's degrees, even though the occupation doesn’t require one. And more than 33,600 PhD-holders are on food stamps.
Does that mean college isn’t worth the cost? Far from it. A college degree can make or break a career. But if you're going to spend years of your life in school (and decades paying off the loans afterward), you should at least pursue an education that won’t lead to the nearest shopping mall.
Should you chase that Ivy League MFA you've always wanted? Could an associate's degree pay off more than a bachelor's? Take our quiz to see if your college degree is really worth the cost.
By Caitlin Dewey, Kiplinger.com
October 2012
Does that mean college isn’t worth the cost? Far from it. A college degree can make or break a career. But if you're going to spend years of your life in school (and decades paying off the loans afterward), you should at least pursue an education that won’t lead to the nearest shopping mall.
Should you chase that Ivy League MFA you've always wanted? Could an associate's degree pay off more than a bachelor's? Take our quiz to see if your college degree is really worth the cost.
By Caitlin Dewey, Kiplinger.com
October 2012
Quiz
Will Your College Degree Pay Off?
Question 1 of 10
Your daughter got into two good colleges: One is an expensive Ivy and the other a (much cheaper) public school. Is the Ivy League worth the big investment?
A. Yes. Students with prestigious diplomas from elite schools usually make more money in the long run.
B. No. Attending a state school could save you thousands of dollars and won't impact your daughter's future earnings.
C. Neither. A college diploma isn’t worth the debt, no matter where you go to school.
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Quiz
Will Your College Degree Pay Off?
Question 1 of 10
Your daughter got into two good colleges: One is an expensive Ivy and the other a (much cheaper) public school. Is the Ivy League worth the big investment?
You're right! B. No. Attending a state school could save you thousands of dollars and won't impact your daughter's future earnings. is correct.
Sorry, wrong!
is incorrect.
The right answer is B. No. Attending a state school could save you thousands of dollars and won't impact your daughter's future earnings..
No offense to all the Ivy alums out there, but studies show that a prestigious diploma ultimately makes very little difference in how your career fares. In fact, economists Alan Krueger and Stacy Dale (Krueger works, somewhat ironically, at Princeton) found that the best predictor of high income is a high SAT score, not a good college placement.
Of course, some Ivies are great values, especially compared to other private colleges. But if your daughter is considering one of the pricier Ivy options, there are more affordable alternatives. A solid state school will provide all the opportunities she needs at a fraction of the cost.
Of course, some Ivies are great values, especially compared to other private colleges. But if your daughter is considering one of the pricier Ivy options, there are more affordable alternatives. A solid state school will provide all the opportunities she needs at a fraction of the cost.
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Quiz
Will Your College Degree Pay Off?
Question 2 of 10
Of these three popular college majors, which promises the lowest unemployment rate?
A. Criminal justice
B. Nursing
C. Communications
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Quiz
Will Your College Degree Pay Off?
Question 2 of 10
Of these three popular college majors, which promises the lowest unemployment rate?
You're right! B. Nursing is correct.
Sorry, wrong!
is incorrect.
The right answer is B. Nursing.
There are plenty of jobs for recent grads – at least if you know where to look. Health care professions such as nursing, pharmacy and treatment therapy boast ultra-low unemployment rates and strong projected growth over the rest of this decade. Nursing, in particular, has an unemployment rate of only 2.2%. That makes it even more likely that you'll score a job right out of school.
If health care doesn’t appeal to you, engineering, agriculture and some education majors – think history, math and special-needs teaching – also promise low unemployment rates. And regardless of your field of interest, researching things such as median salary and unemployment rate can help you determine how much your education will pay off after graduation.
If health care doesn’t appeal to you, engineering, agriculture and some education majors – think history, math and special-needs teaching – also promise low unemployment rates. And regardless of your field of interest, researching things such as median salary and unemployment rate can help you determine how much your education will pay off after graduation.
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Will Your College Degree Pay Off?
Question 3 of 10
You love painting and just got into a great art school, but you don't know what the job market will look like when you get out. What should you do to improve your prospects?
A. Enroll in the program and hope for the best.
B. Take your $40,000 in college savings and rent a loft in Brooklyn. Artists don't need college, anyway.
C. Consider a more marketable major, such as art education.
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Will Your College Degree Pay Off?
Question 3 of 10
You love painting and just got into a great art school, but you don't know what the job market will look like when you get out. What should you do to improve your prospects?
You're right! C. Consider a more marketable major, such as art education. is correct.
Sorry, wrong!
is incorrect.
The right answer is C. Consider a more marketable major, such as art education. .
Art -- along with music, theater and most of the humanities -- has a justified reputation as an "impractical" major. Studio art students are 2.3 times more likely than the average college graduate to end up working retail, an occupation that generally doesn’t require a college degree. The long-term unemployment and salary picture isn't pretty, either.
That doesn't mean you should abandon your passion, though. Try looking for majors that use your skills and interests but have more real-world applications. Case in point: While graduates with fine-arts majors face an unemployment rate of almost 13%, unemployment is only 5.4% for art-education students coming out of school. A university career center or academic adviser can help you choose a major that meets your personal and financial needs.
That doesn't mean you should abandon your passion, though. Try looking for majors that use your skills and interests but have more real-world applications. Case in point: While graduates with fine-arts majors face an unemployment rate of almost 13%, unemployment is only 5.4% for art-education students coming out of school. A university career center or academic adviser can help you choose a major that meets your personal and financial needs.
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Will Your College Degree Pay Off?
Question 4 of 10
Student-loan math quiz, part 1: Let's say you're taking out $25,000 in Stafford loans to pursue a degree in chemical engineering. You expect to make $86,000 a year as an engineer. What's the fastest you can comfortably pay off your debt?
A. 3 years
B. 10 years
C. 30 years
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Quiz
Will Your College Degree Pay Off?
Question 4 of 10
Student-loan math quiz, part 1: Let's say you're taking out $25,000 in Stafford loans to pursue a degree in chemical engineering. You expect to make $86,000 a year as an engineer. What's the fastest you can comfortably pay off your debt?
You're right! A. 3 years is correct.
Sorry, wrong!
is incorrect.
The right answer is A. 3 years.
Congratulations, you did everything right! While your friends spend their post-grad years eating ramen and gathering spare change to send to Sallie Mae, you'll be sitting pretty after only three years. You'll also cut seven years and 72% of the interest off the standard 10-year debt-repayment plan.
How'd we calculate that? We used a handy tool on FinAid.org and the assumption that 10% of your gross monthly income will go to student-loan repayment. (Paying much more than that constitutes a "partial financial hardship," according to the Department of Education.)
Student loans can be tricky to figure out, with various interest rates, repayment terms and consolidation options. But you don't have to study finance to understand this bit of college-major common sense: Going into moderate debt for a stable, high-paying career makes good financial sense.
How'd we calculate that? We used a handy tool on FinAid.org and the assumption that 10% of your gross monthly income will go to student-loan repayment. (Paying much more than that constitutes a "partial financial hardship," according to the Department of Education.)
Student loans can be tricky to figure out, with various interest rates, repayment terms and consolidation options. But you don't have to study finance to understand this bit of college-major common sense: Going into moderate debt for a stable, high-paying career makes good financial sense.
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Quiz
Will Your College Degree Pay Off?
Question 5 of 10
What proportion of people with associate's degrees make as much as or more money than people with bachelor's degrees?
A. None. BA holders always outearn grads with associate’s degrees.
B. About 3 in 10.
C. About one-half.
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Will Your College Degree Pay Off?
Question 5 of 10
What proportion of people with associate's degrees make as much as or more money than people with bachelor's degrees?
You're right! B. About 3 in 10. is correct.
Sorry, wrong!
is incorrect.
The right answer is B. About 3 in 10..
It may come as a surprise to the prep-school crowd, but there's a significant earnings overlap between people with bachelor's degrees and those with lower levels of education. Roughly 28% of associate's degree-holders will make more than $2.9 million over a lifetime of earnings, which is the median lifetime earnings for someone with a BA or BS. About 14% of high school grads will do the same.
The secret, according to Georgetown's Center for Education and the Workforce, is to pick the right profession. A journalist might go to school for four years and make $36,000 a year afterward. An air-traffic controller, on the other hand, only needs an associate's degree -- and salaries in that field average in the six figures.
The secret, according to Georgetown's Center for Education and the Workforce, is to pick the right profession. A journalist might go to school for four years and make $36,000 a year afterward. An air-traffic controller, on the other hand, only needs an associate's degree -- and salaries in that field average in the six figures.
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Will Your College Degree Pay Off?
Question 6 of 10
In this economy, grad school is often Plan B for young people who can't find work. Which of these advanced degrees actually pays off?
A. An MS in public health.
B. An MFA in creative writing.
C. A graduate certificate in exercise science.
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Quiz
Will Your College Degree Pay Off?
Question 6 of 10
In this economy, grad school is often Plan B for young people who can't find work. Which of these advanced degrees actually pays off?
You're right! A. An MS in public health. is correct.
Sorry, wrong!
is incorrect.
The right answer is A. An MS in public health..
The world needs novelists and yoga instructors, sure. But if you're looking for a job that pays off your grad-school debt, public health's the way to go. The average debt for an MS degree is $35,000; the average income for a public health administrator is more than $90,000.
Other high-value post-graduate degrees include pharmacy, business and law. The big winner, though, is no surprise: Doctors leave school with $126,000 in debt but make $184,000 a year, on average.
Other high-value post-graduate degrees include pharmacy, business and law. The big winner, though, is no surprise: Doctors leave school with $126,000 in debt but make $184,000 a year, on average.
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Will Your College Degree Pay Off?
Question 7 of 10
Student-loan math quiz, part 2: Let's say you're taking out $25,000 in Stafford loans to pursue a degree – but this time, in anthropology. You expect to make $40,000 a year as an anthropologist. What's the fastest you can comfortably pay off your debt?
A. 3 years
B. 10 years
C. 30 years
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Quiz
Will Your College Degree Pay Off?
Question 7 of 10
Student-loan math quiz, part 2: Let's say you're taking out $25,000 in Stafford loans to pursue a degree – but this time, in anthropology. You expect to make $40,000 a year as an anthropologist. What's the fastest you can comfortably pay off your debt?
You're right! B. 10 years is correct.
Sorry, wrong!
is incorrect.
The right answer is B. 10 years.
Ten years is the standard repayment term for student loans – and if you make $40,000, you're on track to pay that off without much struggle. (In other words, we're again assuming that no more than 10% of your gross monthly income goes toward paying student loans.)
Of course, paying off a loan into your early 30s can impact your ability to make other big life decisions, such as moving, getting married or buying a house or a car. The common-sense solution? Take out fewer loans or pursue a higher-paying career. An income boost of just $5,000 will enable you to pay off the loan 2.5 years earlier, according to FinAid.com.
Of course, paying off a loan into your early 30s can impact your ability to make other big life decisions, such as moving, getting married or buying a house or a car. The common-sense solution? Take out fewer loans or pursue a higher-paying career. An income boost of just $5,000 will enable you to pay off the loan 2.5 years earlier, according to FinAid.com.
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Will Your College Degree Pay Off?
Question 8 of 10
True or false: The unemployment rate for college-educated workers is significantly less than the unemployment rate for their less-educated peers.
A. True.
B. False.
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Quiz
Will Your College Degree Pay Off?
Question 8 of 10
True or false: The unemployment rate for college-educated workers is significantly less than the unemployment rate for their less-educated peers.
You're right! A. True. is correct.
Sorry, wrong!
is incorrect.
The right answer is A. True..
If you're doubting the value of your college education, take a second to Google the current unemployment rates. As of August 2012, unemployment for the general workforce stood at 8.1%. For people with bachelor's degrees, it was a full four points lower.
Predictably, a degree also pays off in income gains. On average, a person with a bachelor's degree makes $285 more per week than someone with an associate's degree, and $415 more than someone with just a high school diploma.
Predictably, a degree also pays off in income gains. On average, a person with a bachelor's degree makes $285 more per week than someone with an associate's degree, and $415 more than someone with just a high school diploma.
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Will Your College Degree Pay Off?
Question 9 of 10
Of these three popular college majors, which promises the best median salary?
A. Economics.
B. Political science.
C. Sociology.
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Quiz
Will Your College Degree Pay Off?
Question 9 of 10
Of these three popular college majors, which promises the best median salary?
You're right! A. Economics. is correct.
Sorry, wrong!
is incorrect.
The right answer is A. Economics..
The median pay for an economics grad is $70,000 – and with some extra experience or a bit of graduate school, that number jumps into the six figures. Salaries for poli sci and sociology majors, on the other hand, are $59,000 and $45,000, respectively.
What do econ students have that their friends in other social sciences don't? While they all have the same amount of education in related fields, they go into different industries – in fact, one-third of econ majors end up in finance. That promises better salaries than a field such as public administration, where many other social science grads end up.
What do econ students have that their friends in other social sciences don't? While they all have the same amount of education in related fields, they go into different industries – in fact, one-third of econ majors end up in finance. That promises better salaries than a field such as public administration, where many other social science grads end up.
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Quiz
Will Your College Degree Pay Off?
Question 10 of 10
One percent of undergraduate students graduate with super-sized loan debt of more than $150,000. Is that kind of debt worth it, if you plan to go into a field that pays well?
A. Yes. It's an investment in a high-powered career.
B. Maybe – if your parents can help foot the bill.
C. No. Even super-successful grads will need time to pay off that kind of loan.
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Quiz
Will Your College Degree Pay Off?
Question 10 of 10
One percent of undergraduate students graduate with super-sized loan debt of more than $150,000. Is that kind of debt worth it, if you plan to go into a field that pays well?
You're right! C. No. Even super-successful grads will need time to pay off that kind of loan. is correct.
Sorry, wrong!
is incorrect.
The right answer is C. No. Even super-successful grads will need time to pay off that kind of loan..
No matter what you plan to do after undergraduate school, $150,000 for four years of college is arguably insane. In fact, even if you make $100,000 at your first job, it will take you 40 years to pay back that $150,000 without incurring a partial financial hardship – plus an additional $162,000 in interest.
Fortunately, only 1% of student borrowers graduate with that much debt. But it's important to understand the terms of your loans, even if you're only borrowing a few thousand dollars. In a recent study, 20% of graduates said they were taken aback by the size of their monthly payments. For some of them, that could make all the difference between a worthwhile degree and years' worth of debt.
Fortunately, only 1% of student borrowers graduate with that much debt. But it's important to understand the terms of your loans, even if you're only borrowing a few thousand dollars. In a recent study, 20% of graduates said they were taken aback by the size of their monthly payments. For some of them, that could make all the difference between a worthwhile degree and years' worth of debt.
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Quiz
Will Your College Degree Pay Off?
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