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KEY TAKEAWAYS
- College graduates with a theology and religion major generally have the lowest return on their investment when comparing their student debt versus their wages after 10 years.
- Computer science graduates typically have the highest ROI and profit post-graduation.
- While investing in college is a risk, most college graduates will earn more than their high school graduate counterparts.
A bachelor’s degree is a risk. College students must pay thousands in tuition and, in many cases, take on student debt to cover the rest. However, some majors are better suited to ensure your degree will give you a good return on your investment.
Return on Investment, or ROI, is the ratio of the investment’s cost to the gain. There are many other factors to consider when choosing a major. This ranking is a model to help illustrate the wages college graduates will earn relative to the debt they incur for their major.
Why This Matters
Paying for a bachelor’s degree and taking on student debt are risks. Student loans can be a burden for many, hindering spending and lowering savings. It’s important for incoming college students to understand the wages they will earn, as their pay will shape their household finances and broader economic mobility for years to come.
The college degree with the lowest ROI is a theology and religion major, which generates a 842.83% return on the debt a student incurs. The median student loan borrowing amount for a theology and religion major is about $38,722, according to the Education Data Initiative.
If this graduate pays off their debt over 10 years on a standard repayment plan with the current 6.39% interest rate on undergraduate loans, they would pay a total of $52,502 for their degree. Using the difference between the total student debt paid and the total wages after 10 years, Investopedia finds that a theology and religion major would earn a profit of $442,500.
Comparatively, a computer science major would theoretically have the highest ROI, at 2,899.45%. Generally, these graduates start with an annual income of $80,000 and have lower student debt, paying about $31,434 over 10 years.
Computer science majors also have the highest 10-year profit, at $911,426. Several engineering majors also posted high 10-year profits.
Is College Still Worth It?
While more high school graduates are questioning whether attending college is worth it, the earnings of college graduates are still higher than the average high school graduate’s income over the same period.
The median high school graduate starts off with a $35,500 yearly income. Assuming a 3.6% annual increase, a high school graduate would make $418,394 total over 10 years. Meanwhile, the average college graduate would earn about $612,241 total after 10 years, after factoring in total student debt payments.
It is important to note that these calculations don’t account for college graduate unemployment rates, which is especially problematic for some majors. For example, anthropology and computer science graduates have an unemployment rate that is higher than or equal to workers aged 22 to 27 without a college degree.
Additionally, other college graduates who didn’t get financial aid, attended an expensive school, or took more than four years to earn a bachelor’s degree typically had a lower ROI, according to a report from the Federal Reserve Bank of New York.
Methodology
To determine the ROI for different college majors, Investopedia used the average student loan debt per bachelor’s program, as calculated by the Education Data Initiative, as the cost of a college degree. The gain is calculated as the income a college graduate would receive after 10 years, using the median early-career yearly income for each bachelor’s degree type from the Federal Reserve Bank of New York.
