New Data: Which College Graduates Make the Most?

Summary

---

WSJ Your Money Briefing

Episode Title: New Data: Which College Graduates Make the Most?
Air Date: November 21, 2019
Host: J.R. Whalen (Wall Street Journal)
Guest: Andrea Fuller (WSJ Reporter)

---

Episode Overview

In this episode, WSJ’s J.R. Whalen and reporter Andrea Fuller discuss newly released government data that reveals which college graduates earn the most – and the least – in their first year out of school. The discussion centers on the impact of degree choice and institution, offering actionable insight for students and parents navigating the significant financial commitment of higher education.

---

Key Discussion Points & Insights

Introduction to the New College Earnings Data

• Recent Data Release:
  The government has made public, for the first time, comprehensive data on how much graduates from specific schools and majors are earning one year after graduation, along with their corresponding student debt levels.

  • "[The data] allows us to explore where are the programs where people are borrowing a lot of money and not making very much out of college, and where are you getting a good deal?" – Andrea Fuller (03:33)

• Interactive Tool:
  The WSJ has developed an interactive tool that enables users to search for individual colleges and majors to compare earnings and debt for recent graduates.

  • "With that tool, you can look up your college and look up your major and see how much students who graduated recently were earning a year out of school and what their student debt level was." – Andrea Fuller (04:00)

Major and School Matter – Surprising Variabilities

• What the Data Reveals:

  • There's significant variability in earnings, even among elite programs.
  • Example: Math majors at MIT make about $120,000 in their first year, while writing and rhetoric majors at Ivy League schools, like Columbia, often have much lower salaries.
  • "Majoring in math at MIT will net you $120,000 a year out of school. That sounds really nice, but...majors like writing and rhetoric at even some Ivy League schools like Columbia yield pretty low salaries." – Andrea Fuller (04:22)

• Ivy League Surprises:

  • Some non-STEM majors at prestigious schools earn less than their STEM peers at less-renowned institutions.
  • At Brown University, history majors earned more than biology majors, partly due to many biology students moving on to further study, skewing short-term salary data (05:00).

Short-Term vs. Long-Term Earnings Caveats

• Not the Whole Story:
  The data tracks only the first year after graduation, which doesn’t capture long-term earning potential, especially for majors leading to graduate school or professional degrees.
  • "Experts caution that short-term earnings...are not necessarily reflective of your long term earning potential." – Andrea Fuller (05:28)
  • "A lot of people who major in the liberal arts go on to graduate programs in law school and that ultimately yields higher earnings or they do PhDs." – Andrea Fuller (06:18)

Transparency Concerns and Policy Context

• Why Was This Data Hidden?

  • Colleges have been reluctant to release such data due to fear it would be misinterpreted, especially since some graduate/professional pathways (medicine, dentistry) have low first-year salaries due to required residencies.
  • The Trump administration supports transparency, believing it enables consumers to make more informed choices about their education investment (06:42).

• Scope Limitations:

  • The data only tracks students receiving federal aid and only their first-year earnings (07:28).

For-Profits, Public Schools, and the Debt-to-Income Ratio

• Debt Concerns:
  • The key metric: ideally, student debt should be less than first year’s income.
  • For-profit institutions tend to have worse debt-to-income ratios relative to public and nonprofit institutions.
  • "At for profit schools, those debt to income ratios were generally higher, generally surpassed that threshold more often than they did at public schools and nonprofit schools." – Andrea Fuller (07:40)

Unexpected Winners and Red Flags

• Unexpected High Earners:

  • Programs such as business at lesser-known colleges, e.g., Bismarck State, can yield strong first-year earnings ($100,000+) (08:55).
  • "Students who went to Bismarck State and studied business were making over $100,000 a year right out of college." – Andrea Fuller (08:55)

• Costly Risks:

  • Expensive arts programs at elite schools can result in significant debt with modest first-year income (e.g., USC master’s in theater arts: $100,000 debt, $30,000 earnings) (09:20).
  • "[At] University of Southern California...students in Theater Arts owed $100,000 at graduation but were earning just $30,000 a year later." – Andrea Fuller (09:20)

• Fields with Healthy Payoff:

  • Certain degrees, such as nursing and firefighting, deliver low debt-to-income ratios and strong job prospects (09:48).

---

Notable Quotes & Memorable Moments

• On the Value of the Data:

  • "Actually having a number to put on it is really powerful, especially when you're parents are borrowing tens of thousands of dollars to go to some of these schools..." – Andrea Fuller (09:10)

• Host’s Reflection on Data Scope:

  • "It may open them up to think, I never thought about going to school, for example, in Ohio, but now all of a sudden I think I might." – WSJ Host (08:41)

• On Personal Experience:

  • "I'll say this, as a liberal arts major myself: My American studies degree did not yield me $120,000 a year right out of school." – Andrea Fuller (06:09)

---

Segment Timestamps

• [03:17] Introduction of Andrea Fuller and discussion of data’s significance
• [04:00] Explanation of WSJ’s interactive college tool
• [04:17] Findings on first-year earnings by major and school; major variability
• [04:51] Ivy League surprises and context on specific major variations
• [05:52] Discussion of the limits of first-year earnings data
• [06:39] Discussion of why data was previously restricted; policy motivations
• [07:40] Differentiation between for-profit and nonprofit/public schools on debt-to-income
• [08:47] Examples of surprising schools/majors with strong or weak payoffs, detailed case studies
• [09:48] Examples of strong value majors

---

Summary Takeaways

• Degree and School Choice Matter: Significant differences exist in first-year pay depending on both.
• Short-Term Data is Instructive but Limited: First-year earnings aren’t the whole story, especially for majors with graduate study pipelines.
• Debt-to-Income Ratio is a Key Metric: Keep debt lower than your annual first-year income.
• Unexpected Outcomes: Lesser-known schools and programs can surprise with high payoffs; expensive arts/humanities programs at elite schools may saddle grads with high debt and low initial income.
• New Tools for Students/Families: WSJ’s interactive tool is a resource for evaluating educational ROI.
• Transparency is a Growing Focus: The government’s release of this data marks a shift towards information-based education decisions.

---

For more: Explore the WSJ interactive college tool at WSJ.com or via the WSJ app.

---

Transcript

[Small Business Owner]

Access to affordable credit helps me pay my employees, but I don't really need it.

[Retail Industry Advocate]

Inflation is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[Small Business Owner]

See banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[Retail Industry Advocate]

they need while increasing megastore profits. They deserve it, don't they?

[Electronic Payments Coalition Representative]

Tell Congress Stop the Durbin Marshall money grab for corporate megastores paid for by the Electronic Payments Coalition.

[J.R. Whalen]

Here's your Money briefing. I'm J.R. whalen at the Wall Street Journal in New York. The government has released data showing which graduates from which colleges make the most once they graduate. We'll ask a Wall Street Journal reporter to run the numbers. First, some money and market news you should know. Target's streak of quarterly sales gains continues. Overall sales at the retail giant rose 4.5% in the latest quarter that substantial gains in E commerce sales. The National Retail Federation says that spending is likely to continue. It expects holiday sales to rise in the 4% range to about $730 billion. And to meet that expected demand, Target CEO Brian Cornell says the chain will spend $50 million more in payroll this holiday season and double the number of store workers dedicated to online fulfillment and in store same day services. Hospitals are giving the Trump administration's new health Pricing disclosure rule a chilly reception, and the industry is planning a legal challenge to block it. The rule would require hospitals to disclose the rates they negotiate with insurers for services and supplies and care provided by doctors who work for the facility. Currently, negotiated prices are generally kept confidential and can vary widely, even within the same market. The Trump administration argues that its transparency push will bring down costs and allow consumers to shop around for the best care. But some industry experts have said that costs could go up if hospitals demand that insurers match competitors prices. And to many people, Thanksgiving means parades, overeating and having to talk politics with family members. For those who dread that, toymaker Mattel says it has a solution to avert holiday family feuds. It's a nonpartisan version of the card game Uno. Instead of the traditional red and blue cards, their limited edition spin on the game has orange and purple ones. And if a family member breaks the no politics at the table rule, a veto card with the word politics and prohibition printed on it allows players to skip over violators. With student loan debts swelling to more than $1.5 trillion, students and parents were want to know how much bang they can get for their college buck. The Wall Street Journal has compiled Data released by the government that shows which college degrees are paying off instantly, which leaves students saddled with more debt than potential income after graduating. And Wall Street Journal reporter Andrea Fuller is here to discuss. So, Andrea, this specific level of information

[Wall Street Journal Host]

hasn't been available to the public before now.

[Andrea Fuller]

So the Obama administration released a bunch of data through what's called the College Scorecard, and that had data on median earning who attended a particular school. But it didn't really tell you what you would earn or how much you would borrow, depending on your major. And it didn't cover graduate programs at all. So we were really excited as journalists to have all of this data. It's really rich, allowing us to explore where are the programs where people are borrowing a lot of money and not making very much out of college and where are you getting a good deal?

[J.R. Whalen]

And there's a tool in the story

[Wall Street Journal Host]

in the Wall Street Journal, an interactive tool.

[J.R. Whalen]

What does that allow people to do?

[Andrea Fuller]

So with that tool, you can look up your college and look up your major and see how much students who graduated recently were earning a year out of school and what their student debt level was.

[Wall Street Journal Host]

What did the data tell us about graduates and what they earn in their first year out of school?

[Andrea Fuller]

It's quite varied. A lot of it is what you would expect. Majoring in math at MIT will net you $120,000 a year out of school. That sounds really nice, but there's a lot of variation. Majoring in writing and rhetoric at even some Ivy League schools like Columbia yield pretty low salaries.

[Wall Street Journal Host]

There was some surprising data about Ivy League schools coming out of this information.

[Andrea Fuller]

I think it really varies right out of school. It seems like across the board, the top programs in terms of debt to income ratios being low, were computer science programs at elite schools. But if you look down, there's a lot of variation amongst English programs and writing programs. At Brown University, for example, history majors earned more than biology majors. And there may be some sort of confounding factors there. For example, a lot of biology majors go on to med school. So perhaps those who are actively in the workforce, which this data measures, are doing something more of an interim figure. So experts caution that short term earnings, what you earned your first year out of college, are not necessarily reflective of your long term earning potential. But the ed department hopes to actually continue compiling these data year after year.

[Wall Street Journal Host]

And this data in this story and put out by the government, only covers graduates earnings from for one year out of college. So like you said, there are some majors that maybe have a more long term potential in the ramp up in salary like liberal arts, and they may not show up as high amounts in that first year snapshot of data.

[Andrea Fuller]

I'll say this, as a liberal arts major myself, Me too. My American studies degree did not yield me $120,000 a year right out of school. However, a lot of people who major in the liberal arts go on to graduate programs in law school and that ultimately yields higher earnings or they do PhDs. There's a lot that can change in the course of a career.

[J.R. Whalen]

Why was there an effort to keep

[Wall Street Journal Host]

this information hidden in the past?

[Andrea Fuller]

Colleges have long just been really worried about the caveats that students won't understand that this isn't reflective of long term earnings. This is just what people are making in their first year out of school. For example, with medical and dental schools, everyone goes and does residency at medical school and at a lot of dental schools, a lot of students do it. So they're worried that it will confuse students. But the Trump administration's belief is that instead of over regulation, as they would view it, that the release of this information will allow consumers to make better choices and not attend programs that they don't feel are going to be worth their debt.

[Wall Street Journal Host]

Now, the data only covers graduates for one year out of school. It also only covers students who were federal financial aid recipients.

[J.R. Whalen]

But there was also significant differences in

[Wall Street Journal Host]

the numbers pertaining to public and for profit schools.

[Andrea Fuller]

What we looked at are debt to income ratios and general experts say you should keep your debt lower than your income so borrow less money than you make in a year. Now, at for profit schools, those debt to income ratios were generally higher, generally surpassed that threshold more often than they did at public schools and nonprofit schools. And this is an ongoing, long debated issue. The Obama administration particularly focused on for profit colleges and programs there, whether or not they were going to provide gainful employment. And the Trump administration has rolled back some of those rules and is focused more on transparency efforts.

[Wall Street Journal Host]

And this data with respect to how debt has just been piling up and piling up and the way you want to keep your debt to income ratio manageable could really change people's thoughts as

[J.R. Whalen]

to where they want to go to school.

[Wall Street Journal Host]

It may open them up to think, I never thought about going to school, for example, in Ohio, but now all of a sudden I think I might.

[Andrea Fuller]

Yeah, there's a lot of interesting stuff in this data. Just as it's surprising to find out, wow, here are some people who went to Columbia and are only making $19,000 a year. We found that students who went to Bismarck Ste. And studied business were making over $100,000 a year right out of college. And so I think in addition to people finding data that kind of freaks them out a little bit, there's a lot of very expensive arts programs at elite colleges where I think people have long known that arts majors and English majors are going to make less than math majors. But actually having a number to put on it is really powerful, especially when you're pay parents and you are borrowing tens of thousands of dollars to go to. Some of these schools like NYU or USC are very expensive. One of the schools that we highlighted in our data was a master's degree program at the University of Southern California with a really high debt to income ratio. Students in Theater Arts owed $100,000 at graduation but were earning just $30,000 a year later. That said, the flip side of that is that Bismarck State business majors, MIT math majors, where the student loans are incredibly low and so you can find a lot of great opportunities for payoff. Some of these programs in nursing or in firefighting have very low debt to income ratios.

[Wall Street Journal Host]

Bismarck State, North Dakota, a gorgeous part of the country.

[J.R. Whalen]

So check it out on WSJ.com and the WSJ app. And that's Wall Street Journal reporter Andrea Fuller with us. Andrea, thanks for coming on the show.

[Andrea Fuller]

Thanks for having me.

[J.R. Whalen]

And that's your money briefing. I'm JR Whalen in New York for the Wall Street Journal.

[Small Business Owner]

Access to affordable credit helps me pay my employees, but I don't really need it.

[Retail Industry Advocate]

Infliction is killing me, but who cares? Big retailers are making record profits. That's why we support the Durbin Marshall credit card bill.

[Small Business Owner]

See banks and credit unions help small businesses make payroll. This bill would cut the vital resources

[Retail Industry Advocate]

they need while increasing megastore profits. They deserve it, don't they?

[Electronic Payments Coalition Representative]

Tell Congress Stop the Durbin Marshall money grab for corporate megastores paid for by the Electronic Payments Coalition.