As the cost of college education gets ever higher, prospective students, and often their parents, may wonder how likely it is that the debt or investment required to get that degree will pay off anytime soon, or at all. Last month, the federal government released a tool that provides detailed answers to that question.

Very detailed. For example, I just used it to determine that a Bachelor's degree in English from the University of Iowa (which I happen to have) costs an average $15,103 per year and results in a median starting salary of $24,900. It results in average student debt of $24,250, or a monthly payment of $252. On the other hand, a Bachelor's degree in Computer Science from Stanford would cost an average $13,261 per year (costs take financial aid into account). That would result in a median starting salary of $126,400 and median debt of $15,000 with a monthly payment of $156, all of which sounds like a much better deal. It's important to note that these debt figures are for federal student loans only. They don't account for private loans, such as federally guaranteed bank loans, nor for debt taken on by a student's parents. 

The College Scorecard is project that was begun by the Obama administration as a way for parents and students to better judge the value of an investment in specific majors at specific four-year colleges and also cut through some of the hype and some of the conventional wisdom about what different degrees from different schools are worth in terms of earnings. The scorecard definitely has limitations--for instance it doesn't look past the first year's average earnings. But it's still an incredibly useful guide.

Will your student debt be more than your first year's earnings?

For example, as the Wall Street Journal points out, most graduates will have an annual salary their first year in the work force that is greater than their total college debt. (That doesn't mean, of course, that they can pay off their debt in one year.) Still, any degree that will give you less of an income than your total debt in your first year of employment should be considered a red flag because it might be particularly hard to pay off. This often happens with degrees in medical areas, since medical education is particularly costly and many graduating doctors begin their careers with relatively low-paying residencies. Still, the Journal flags New York University's Dentistry program, where a graduating dentists have amassed a median $387,660 of debt but only earn a median $69,600 a year. (A spokesperson for NYU told the Journal that many dentists go on to earn much more.)

Perhaps most importantly, it can help you make informed decisions about how your choice of alma mater can influence your earnings after graduation, even when comparing similar degrees and similar jobs. For example, as the Journal notes, Computer Engineering graduates of DeVry University-Illinois amass a median $53,391 in debt but earn only a median $37,800 in their first year after graduation. Meanwhile, a Computer Engineering graduate from Wichita State University in Kansas graduates with a median debt of $31,000 and earns a median $61,800 for the first year after graduation. Although it's pretty user-friendly and straightforward, because the site contains so much information, it can be a bit confusing to find what you're looking for so CNBC has provided a helpful guide.

Over time, the College Scorecard should get more and more useful, as data from future years' employment is added. Right now, debt levels reflect the debt of students who graduated in the 2016 and 2017 school years and earnings reflect the annual earnings of students who graduated in the 2015 and 2016 school years. The Department of Education says it will continue to track students' earnings each additional year that they are in the workforce and add that information to the tool. Ultimately, it will be able to offer data on median earnings for students' first 10 years after graduation. But even as it is today, the College Scorecard is a huge source of information. Anyone wondering whether to attend college, which college, or which major to choose should spend some time exploring it.  

Published on: Dec 4, 2019
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