ROI, or “Return on Investment,” is a term that media outlets like Forbes have begun using to describe the value of a college degree. These outlets started using this term to encourage prospective college students and their parents to think seriously of college as a financial investment alongside all of our other considerations about college. The idea behind ROI is that the value of a college degree is determined in part by the cost of the degree against the earning potential of the degree. A degree that costs a lot of money with low earning potential, so the thinking goes, has a bad ROI and is a bad investment overall.
This way of thinking is I think good for future college students overall, and here at Bright Futures Educational Consulting we emphasize ROI in our advising for degree choices. Unfortunately, despite the wealth of reporting about the value of various college degrees, very little of it is of much value. It either groups together significantly different degrees into deceptively large categories, or it fails to consider how limited are the numbers of people who can pursue specific degrees, or how demand for certain degrees might be short term.
For example, much reporting on higher education talks about the “humanities” as a group. That’s a mistake of the first kind, lumping together a large number of disparate degrees to create a false impression. English MAs, for example, 24 years after graduation make only about $7000 a year less than MBAs, but the same can’t be said for art history majors. There’s no meaningful data about “humanities” unless you’re majoring in “humanities.” You need to look at the ROI for your specific area of the humanities.
Other reporting touts degrees in chemical engineering as having the highest earning potential, but seems to ignore the fact that maybe 3% of high school graduates have the math skills to pursue a degree in chemical engineering — and that’s why the degrees lead to such high paying jobs. The market is not yet saturated. That’s not useful information for most high school graduates, but if you’re a math wiz, it might be.
What I’d like to do is apply ROI thinking to a specific degree to show you how it works. One of the most popular degrees is education, and these degrees are lumped into “humanities and social science” by some reporting. Here’s what you need to know about a degree in K-12 education:
- First, a degree in K-12 education is a lot of work. In many states, an education degree is almost a double major, as you have to major in education and in a subject matter (at least if you’re pursing high school teaching). It’s very likely this degree will be expensive as it may take you more than four years to graduate.
- Next, it’s a tough field. Most K-12 educators quit teaching after five years. Our system isn’t geared to support teachers and, for that reason, isn’t really supporting students well either. Teachers across the country who want to serve their students feel very frustrated in their ability to do so.
- Finally, in most places, it’s a low paying field. Starting salaries for K-12 instructors with bachelor’s degrees range from the high $20s to the low $40s depending on the school district.
Does this mean no one should go into K-12 education? If you think you’ll love teaching regardless of the challenges, then pursue that career, but I do think everyone who wants to teach needs to go in with eyes open. And, they need to prepare. My recommendations for anyone going into K-12 education, considering ROI, are as follows:
- First, declare your education major your freshman year. That will cut your time to graduation by allowing you to better plan your classes across four years rather than just two or three.
- Next, avoid private colleges. While costs vary by state, most public universities are much cheaper than most private colleges, especially small private colleges. Since the ROI on a degree in K-12 education will be low, you want to avoid debt by keeping costs down.
- Finally, ask the right questions. When you’re visiting a college and checking out their education programs, ask what percentage of students pass the Praxis test the first time and what percentage are placed in jobs before the end of their senior year. Here’s a good rule of thumb: if an admissions officer doesn’t know the answer to these questions, it may well be because the answers are bad. Get that information before you enroll, and if you can’t, go elsewhere.
Did you find this information useful? Bright Futures Educational Consulting can provide you guidance on the return on investment for any degree that you might want to pursue and your best college and university options for that degree. Best of all, that information will be personalized for your specific state and circumstances. Contact us by phone or email for a free initial consultation. It’s a small investment now that can save you tens of thousands of dollars in student loan debt later.