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Students who graduate from the University of Colorado Boulder actually will make about $8,000 more a year than students who graduated from less elite four-year universities in the state. State data indicate that the extra payoff is only half as much, about $4,000. Credit: AP Photo/David Zalubowski

How much is a college degree worth? Georgetown University’s Center on Education and the Workforce calculates that a bachelor’s degree will confer an average lifetime earnings of $2.8 million. Not too shabby, but we’ve all heard tales of college graduates mired in student debt, living at home and unable to rise beyond a barista. Employment prospects depend greatly upon which college you attend and what you study. 

Some states, from Florida to Washington, have built college websites for high school students and their parents to show what recent graduates actually make in the working world. It can help families decide among institutions and even compare the financial payoff between studying business versus journalism (heaven forbid!).

But a new study finds that these salary figures, designed to motivate students to go to college and major in lucrative fields, are off – sometimes significantly so. A July 2022 analysis from economists at the U.S. Census Bureau and the University of Michigan found that the financial payoff for attending the most prestigious public universities in each state, known as flagships, was actually 10 percent higher than the salary figures that states publish. 

States have access to wage data from their unemployment insurance programs, which only cover workers who remain in the state. Individual states have no way of tracking earnings of graduates who move out of state. That means a University of Iowa engineering graduate who flocks to Silicon Valley and earns an impressive starting salary of $150,000 isn’t factored into Iowa’s data of how much a bachelor’s or an engineering degree will get you in the labor market.

“The graduates that leave tend to be higher earning,” said Kevin Stange, an associate professor of public policy at the University of Michigan. “And so that’s why you’re going to misstate the earnings of people if you just look at those who stay.”

Stange’s co-author, economist Andrew Foote of the U.S. Census Bureau, had access to earnings records in all states and the two researchers were able to link them to students’ education records in five states: New York, Pennsylvania, Texas, Ohio and Colorado. The paper, “Attrition From Administrative Data: Problems And Solutions With An Application To Postsecondary Education,” is an early draft, circulated in July 2022 by the National Bureau of Economic Research, and has not been peer-reviewed.

Understating the payoff for elite institutions could make a difference in students’ choices. One study found that many low-income students didn’t attend Texas’s flagships even when they were guaranteed admission. The idea behind the college websites was that parents and students would make better decisions that could lift families out of poverty if they had access to salary information. But this study suggests that the salary information that states are publishing may be too incomplete to influence families to act in the way that policymakers hoped.

The University of Colorado Boulder is a good case in point. The state reports that its bachelor’s degree students typically earn almost $55,000 a year five years after graduation, compared with about $51,000 a year at one of the state’s less prestigious four-year institutions. A prospective student might reasonably conclude that the $4,000 in extra future pay a year isn’t worth the extra student loan debt and distance from home.

But the actual payoff for going to the University of Colorado Boulder is actually almost $8,000 more a year and an average salary of nearly $59,000, according to Stange. That’s because 45 percent of all University of Colorado, Boulder, students leave the state within five years of graduation, with many jumping to the West Coast and earning more than those who remain in Colorado. 

The extra payoff for going to Pennsylvania State University may be even greater. Stange said that fewer than half the bachelor’s degree graduates of its state flagship remain in state.

College graduates of state flagships had the largest discrepancies between published and actual salaries. But the researchers also noted two other areas where state data understates college payoffs:

Five majors where state data understate salaries five years after graduation

  1. Communication and journalism
  2. Engineering
  3. Architecture
  4. Physical science
  5. Computer science
Source: Table 5 of “Attrition From Administrative Data: Problems And Solutions With An Application To Postsecondary Education,” by Stange and Foote.
  • Communications and engineering majors at four-year institutions. 
  • Two-year community college students who earn associate degrees in career and technical fields, such as computer science, health and business. They actually earn 19 percent more than high school graduates, not 18 percent. Most of these graduates remain in state but a few relocate for higher paying jobs elsewhere.  

Another website, College Scorecard, which was created by the federal government, avoids the in-state data problem. It links wages that are reported to the IRS across the country. But it only tracks the wages of students who received federal financial aid or loans. At many state flagships, the majority of students don’t receive federal aid or take out loans; their future earnings aren’t in the Scorecard data at all.

Consider the University of Colorado Boulder again. The College Scorecard says that its graduates earn $60,740 after 10 years. But that refers only to the 29 percent of students who took out student loans. Even Colorado’s understated data puts the 10-year salary figure at $70,850.

These online tools are helpful but should only be a rough guide the connection between college choice, fields of study and future salaries. A good rule of thumb: the more prestigious the college and sought after the major, the more understated the dollars.

This story about state flagships was written by Jill Barshay and produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

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