College

The highest ROI college degrees

Jan. 14, 2019

987 words long, 5 minute read

College debt for Americans is skyrocketing. In 2017 - 2018 the average cost of going to an in-state public university was $25,290. This figure includes tuition and room and board, but the numbers are staggering. They also seem for the time being to be on the rise. 

If you are considering college, it can be difficult to figure out what degree to choose. On one hand, it is important to choose a career that you will enjoy for the long haul as there is no reason to be unhappy in your job. But, you also want to make sure your degree will help you get a job that can pay the bills. Balancing the two can be incredibly tough.

We decided to see what degrees have the highest return on investment for fun. Return on investment in this context means how much you can theoretically make over your lifetime compared to the cost of the degree. To keep things straightforward and fair, we will use the following criteria:

  • Average total cost per year of $25,290 (a total degree cost of $101,160)
  • Assuming a bachelor level degree (4 years)
  • Analysis over the first 20 years of your career
  • 10 years in "early" career, 10 in "mid" career. Both will have salary bumps for theoretical promotions

Like most things in this area, some of the numbers will be fuzzy and imperfect. There are obvious exceptions to every rule. Some people will make more and some will make less than the average salaries we put out. It is more of a theoretical study to get an idea of what degrees might be good to target if you are just starting out. 

I also wanted to point out that in our hypothetical scenario we won't be accounting for yearly raises. The average raise is somewhere around 3-6% a year, but is becoming increasingly uncommon. You should expect to get salary bumps as you go through your career. For our purposes, we are going to keep things simple. Incorporating a 4% increase wouldn't affect the data much other than possibly make high paying jobs become outliers.

We will be using PayScale for our data source about average salaries. They have salaries grouped by degree which will make it easier to get averages out of the data set. Based on their data, here are the degrees where you can earn the most:

Payscale Rank Degree Entry Level Salary Mid Level Salary
1 Petroleum Engineering $82,700 $183,600
2 Operations Research & Industrial Engineering $79,600 $166,300
3 Actuarial Mathematics $54,700 $158,100
4 Chemical & Biomolecular Engineering $71,900 $138,100
5 Public Accounting $60,700 $135,000
5 Building Science $50,700 $135,000
7 Aeronautics & Astronautics $71,400 $133,300
8 Systems Engineering $70,800 $131,200
9 Business Analysis $53,400 $129,800
10 Chemical Engineering $71,800 $126,900
10 Economics and Mathematics $63,200 $126,900

It's pretty obvious that STEM degrees represent heavily in this table. I believe out of the top 10 only 1, a general business degree, isn't a STEM related field. This isn't surprising given that there is a current shortage of STEM graduates and they are known to be high paying jobs.

What I do find interesting is the big bumps between entry level and mid career. For example Actuarial Mathematics starts out at just over $54,000 starting out, but by mid career far surpasses other degrees that started out nearly $20,000 more! Career trajectory is often one of the overlooked items when choosing a degree. It's nice to make a lot right out of college, but it can really pay dividends down the road if you get a nice salary bump. 

If you are choosing your degree now, take a look and see what the possible career and salary paths are to get an idea of your possible path. As we said before, no career is set in stone. Instead think of your research as a baseline for what you might want to do. Things can change (and they often do!) but it is nice to go in to such a large expense with at least somewhat of a plan.

Now, lets apply our analysis. We will use the data from the above table to do our analysis. Essentially, we will take 10 years of entry level salary + 10 years of mid level to give us a total. Then we will rank by that total and see if our ranking is any different.

Our Rank Payscale Rank Degree Entry Level Salary Mid Level Salary After 20 Years ROI
1 1 Petroleum Engineering $82,700 $183,600 $2,663,000 26.3x
2 2 Operations Research & Industrial Engineering $79,600 $166,300 $2,459,000 24.3x
3 3 Actuarial Mathematics $54,700 $158,100 $2,128,000 21.0x
4 4 Chemical & Biomolecular Engineering $71,900 $138,100 $2,100,000 20.8x
5 7 Aeronautics & Astronautics $71,400 $133,300 $2,047,000 20.2x
6 8 Systems Engineering $70,800 $131,200 $2,020,000 20.0x
7 10 Chemical Engineering $71,800 $126,900 $1,987,000 19.6x
8 5 Public Accounting $60,700 $135,000 $1,957,000 19.3x
9 10 Economics and Mathematics $63,200 $126,900 $1,901,000 18.8x
10 5 Building Science $50,700 $135,000 $1,857,000 18.4x
11 9 Business Analysis $53,400 $129,800 $1,832,000 18.1x

Taking a look at our analysis the first four don't change. They stay solidly in the same place as what PayScale is showing. Building Science has the biggest drop of 5 places while Chemical Engineering goes up 3 places.

After thinking on it, the degrees that have solid earnings right away with moderate growth improve the most in our rankings. Even though Building Science has nearly a 3x salary increase from early to mid, it can't make up for past earnings. Chemical Engineering doesn't even double in salary, but because of early earnings it climbs spots on our rankings. 

The largest gainers actually correspond to the idea in the FIRE community:

Constant, incremental gains are going to pay off in the long run versus huge jumps and spurts

The idea is to remain consistent and you can save and grow your wealth incredibly fast. In this context it is interesting because you would assume the largest gainers would have the best outcomes for return on investment. In reality, constant returns almost always outpace the big gain.


How to use this data

The real question is how to leverage this data. The real answer is up to you. If you already have an idea of what you want to do and it's not on this list, great. If you want to make as much as you can right away to FIRE, great. This analysis is meant to showcase degrees that pay you back quickly on your "investment" of paying tuition. If you are concerned with paying back student loans, it can benefit you to know some possible paths to earn a good amount of money quickly. The degrees above have a clearly defined path to high income. If you choose to follow that path is completely up to you. There is no one silver bullet when it comes to building a career. Use our analysis as one data point in a sea of many that frame your decision on your career. 

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