lifestyle
A study found that many graduates' lifetime earnings do not recover their higher education's steep price tag.
By May Vin Ang — 16 May 2024, 01:10 PM
- #lifestyle
- #education
- #degree
- #university
- #mastersdegree
- #diploma
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- #finance
- #ROI
Cover image via Bernama/New Straits Times & Dom Fou/Unsplash
Is higher education worth it?
Well, according to research, some degrees have a better payoff than others.
According to a new study by the Foundation for Research on Equal Opportunity (FREOPP), a US public policy think tank, while most university degrees increases a graduate's lifetime earnings, some programs leave students financially worse off.
The report assessed the economic value, or the return on investment (ROI), of 53,000 degree and certificate programs of universities in the US.
It defined ROI as the amount a student can expect to gain financially for having pursued a university degree, compared against costs attributable to the degree, including tuition and foregone earnings while enrolled.
Image via Bernama/New Straits Times
According to the report, many graduates' lifetime earnings do not recover their higher education's steep price tag
While more than three-quarters have a positive ROI, it found that 23% of bachelor's degree students were unlikely to earn enough in their lifetime to fully compensate for the cost and risk of pursuing a tertiary education.
The report found that bachelor's degrees in fine arts, education, English, and psychology tend to have a smaller payoff — or none at all.
Meanwhile, bachelor's degrees in engineering, computer science, nursing, and economics usually have a better payoff.
Professional degrees in law, medicine, and dentistry also tend to have a strong payoff, while business, political science, mathematics, and the physical sciences (which includes chemistry, geology, and physics) tend to be fields of study with a decent ROI.
Image via Dom Fou/Unplash
The report also found that nearly half of master's degree programs leave students financially worse off
According to the report, 43% of master's degree programs have a negative ROI.
It attributed high costs and "often-modest" earning benefits of pursuing a master's degree as the reasons for the negative payoff.
It found that master's programs in arts and humanities, as well as public-service fields such as education and social work, tend to have low to negative ROI, while master's degrees in science, engineering, and nursing tend to have stronger ROI.
"Even the MBA, one of the world's most popular master's degrees, frequently has a low or negative payoff," it said.
Image via New Straits Times
Nonetheless, the report said ROI should not be the only consideration students take into account when deciding which university course to study
"ROI does not capture everything a prospective student might care about... but the ROI estimates presented in this report can help students and their families make better choices regarding higher education," it said.
The FREOPP report added that stakeholders, including colleges and policymakers, could also use these figures to better understand which economic sectors are in need of qualified workers to build a stronger economy and society.
Check out the full report here.
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