Is the engineering department reputable enough to stand out on a resume? Could the starting quarterback lead the football team to a BCS bowl berth? Will my parents write me out of the will if I refuse to attend their alma mater? Those are just a small sampling of the hundreds of factors that prospective students might take into account when deciding where to attend college.
In today's economy a college degree can't guarantee a high salary, or even full-time employment. The type of degree program and level of education a student attains can help to determine earning potential -- the Bureau of Labor Statistics shows college graduates achieved higher employment and median wages in 2012 than individuals without a college degree. But how much does the school itself impact either starting salaries or lifetime earnings?
Schools with competitive starting salaries
A high starting salary can help graduates hit the ground running as they enter the workforce. A 2013 survey by NerdScholar, a financial literacy website, ranked the top 25 U.S. colleges and universities with the highest reported salaries upon graduation. Carnegie Mellon's School of Computer Science ($84,409), Stanford University School of Engineering ($74,698) and New York University's College of Nursing ($70,236) top the list. The study utilized surveys of college grads entering the workforce in 2010-2012 to compile the list.
Schools that specialize in business, science and technology dominate the NerdScholar list. Several engineering schools are included in the top 25, while business schools account for six spots on the list. The survey seems to reinforce the old refrain that there's no future in history… And fields like philosophy and English are not known to translate into high-paying careers.
Maximum return on investment
High starting salaries might help graduates get a jumpstart on those student loan payments, but what about long-term earning potential? PayScale's 2013 College ROI Report measures the cost of attending more than 1,000 colleges against median alumni lifetime earnings. Harvey Mudd College topped the list, followed by the California Institute of Technology and the Polytechnic Institute of New York University. Comparing the type of school, those with a strong engineering focus performed well, with an average ROI of $1,208,383 -- that's more than twice the average ROI of liberal arts schools, which was $458,405. The Art Institute of Pittsburgh finished last in PayScale's report, with an ROI of minus $228,000.
"Most consumer issues seem to have a pocketbook component, and possibly no issue strikes the pocketbook more than higher education and its rising tuition," said Katie Bardaro, a lead economist at PayScale. "In this uncertain economic climate, understanding the potential return on the investment in education is vital."
Prestige on the regional level
The national prestige of postsecondary institutions could correlate to higher salaries, but how does this play out at the regional level? The study Higher Education Pays: The Initial Earnings of Graduates of Texas Public Colleges and Universities suggests a school's geographic location impacts starting salaries more than prestige. The organization College Measures examined median earnings for Texas students based on their school, program of study and level of education. A comparison of first-year earnings for graduates with bachelor's degrees showed a difference of nearly $20,000 between institutions with the lowest and the highest median wages.
The lowest median earnings ($28,451) were linked to Sul Ross State University in Alpine, Texas, a remote area with a weak labor market. The highest figure ($48,086) was recorded by the University of Houston-Clear Lake. The same trends were evident for specific majors. Median first-year earnings for individuals with a bachelor's degree in psychology ranged from $18,516 at Texas A&M University-Central Texas in Killeen, Texas, to $36,056 at the University of Houston-Downtown.
"I was really struck that the public is fixated on premier and elite institutions, but the actual best bargains in Texas higher education are regional comprehensive universities," Philip Castille, the president of University of Houston-Victoria, told the Texas Tribune. "If you look at the data, there is no connection at all between the prestige of the institution from which you got your bachelor's degree and the amount of earnings you achieved in your first year after graduation."
Can selectivity translate into success?
Regardless of a student's location, does attending a more selective school impact success and earnings? A 2011 New York Times article refers to an updated study suggesting that elite colleges do not necessarily offer an earnings boost for graduates. One of the study's authors, Alan Krueger, tells prospective students that just going to college is more important than the particular college you choose.
The updated study echoes the National Bureau of Economic Research's 1999 version, which found that an individual's income correlated with the average SAT score of the schools they applied to but did not attend, rather than the average SAT score of the school they actually attended. Researchers call this the "Spielberg Model," because the famous movie director attended Cal State Long Beach after being rejected by the USC and UCLA film schools. A student's ambition, motivation and desire to learn may determine their personal success more than the average academic ability of their classmates.
Ultimately, attending a nationally prestigious school can't hurt a student's chances of earning a high salary after graduation. However, it isn't the only factor that influences lifetime earnings. Field of study, level of education, geographic location, personal ambition and other considerations can all contribute to earning potential. While gridiron glory or parental wishes can play a role in the decision, if money is a priority, prospective students should take into account all these factors when choosing where to attend school.