The so-called degree premium has long been the biggest selling point of going to college. Simply put, on average college graduates earn more over a lifetime than high-school graduates.

In 1983, the so-called wage premium was 42 percent. That’s how much more the typical bachelor’s degree recipient earned compared with a high-school graduate. Today, it surpasses 80 percent.

But that number has always been based on broad averages, and in recent years a more nuanced view of the economic value of college has emerged that shows not all colleges or majors are created equal when it comes to the return on investment.

College Tuition is Outpacing the Wage Premium and Inflation


Source: Goldman Sachs

Going to college is still worth it, given some sort of post-high-school credential provides benefits to the individual and society that can’t be easily measured in dollars and cents. Still, the question more and more students should be asking these days is where and how that degree should be obtained and just how much they should spend, especially if they need to take on mounds of debt to pay for a degree.

Wages after graduation vary greatly based on college and major, and not always in ways that you’d expect. An analysis of new Department of Education data last fall by the Economist found that graduates of the bottom 25 percent of colleges (based on SAT scores of its incoming students) earned less, on average, than high-school graduates.

Economist Top 10 Universities: Alumni Earnings Above Expectations

Most of the financial rewards of a degree, the Economist found, go to graduates of those schools in the very top tier of scores or with lots of engineering, computer science, and business majors. The gap between the wages of those in the 99th percentile of scores and the 99.9th percentile is as large as the one between the 1st and 20th percentile.

The Economist calculated its own rankings on schools it found produced the best salary outcomes based on the incoming SAT scores of its students. There are usual suspects at the top of the list, such as Harvard and Penn, but also at the top are Washington & Lee, Villanova, and Lehigh. Yale is near the bottom.

Perhaps the most important factor in post-graduate success is HOW you go to college

Where you go to school is a factor in how well you do afterwards, but it’s certainly not the only one. Even recent graduates of Harvard are standing in the unemployment line. What might matter more is what you do while you’re in school—your major plays a role as well as how much you engage in your studies.

First, the impact of your major. Georgetown University’s Center on Education and the Workforce has found that of the twenty-five highest-paying majors, all but two (economics and business economics) are in the so-called STEM fields (science, technology, engineering, and math).

Even so, the head of the center, Tony Carnevale, warns students who pick their majors solely on the basis of the expected paycheck not to count their money too quickly. Salaries for specific majors can differ greatly too. The top quarter earners who majored in humanities or the liberal arts make more than the bottom quarter of engineering majors. What’s more, only 22 percent of graduates with degrees in science and math actually get jobs in those fields and utilize their training.

Why is there such a wide variation within majors? Because some students take advantage of the opportunities presented during their four years of college while others sleepwalk through their studies.

Gallup has found that a graduate’s well-being (that is, being happy, comfortable, and satisfied) is closely tied to what you do while in college. College graduates who said they had a professor who cared about them as a person and encouraged them to follow their dreams were more than twice as likely to be engaged in life and work after graduation—meaning they were curious, interested, and had a passion for what they were doing.

The same was true for graduates with outside-the-classroom experiences, internships, research projects, campus clubs, and athletic teams. But here’s the problem: only 14 percent of graduates recalled having a professor who made them excited about learning and encouraged them.

Such a dizzying array of numbers is likely to confuse anyone thinking about college. The bottom line is to pay attention to the nuances in the averages about the ROI of a college degree and ask a lot of questions about the outcomes of the schools you might be considering.

No match is perfect as the labor market is moving faster than higher education is responding, but armed with the right information about the value of a college degree you will have a shot at making an informed decision.

Jeffrey Selingo is author of three books on higher educationYou can follow his writing here, on Twitter @jselingo, on Facebook, and sign up for free newsletters about the future of higher education at jeffselingo.com.

He is a regular contributor to the Washington Post’s Grade Point blog, a professor of practice at Arizona State University, and a visiting scholar at Georgia Tech’s Center for 21st Century Universities.