Based purely on earnings, Massachusetts Institute of Technology took the crown in the first set of rankings, with students pulling in an annual salary of $91,600 10 years after starting school. In a close second, the United States Merchant Marine Academy, with its pipeline to jobs in the lucrative shipping industry, produces students making $89,000 a year. Harvard University rounds out the top three with students making $87,200 a year a decade after starting school.
There are similarities between the top 20 schools in the first set of rankings. Many are elite private universities, like Stanford University and Princeton University, and reputable liberal arts colleges such as Washington and Lee University. A majority of the schools have a heavy focus on technology and engineering, like Harvey Mudd College, or specialty training, such as the four maritime academies.
“When you go to college, 30 percent of your courses is your major and the rest is general education, so in the case of MIT, it’s the majors that drive the earnings. In the case of Harvey Mudd or the Merchant Marine Academy, its the occupation,” said Anthony P. Carnevale, director and research professor of the Center. “It looks like the optimal case for earnings is to combine general education with occupational education.”
In the second set of rankings, researchers adjust for differences in the composition of majors within each college to isolate the effects of the quality of the schools. In other words, attending Harvard or Georgetown generally leads to higher wages even though the schools don’t have large shares of students enrolled in lucrative majors.
Former Harvard students make $29,200 more than would be expected based on their choice of majors, and the same is true for students at the University of Colorado-Denver, where students make $26,600 more than expected. Harvard’s reputation, selectivity and ability to attract top faculty gives the school an edge. Meanwhile, Colorado’s flagship university has a high percentage of older students with a work history that can make it easier to advance in the job market.
“You’ve got people who are working full time going to college, people who started college a few years later,” Carnevale said. “In the associates degree, for instance, a lot of the students are older so they’ve already got a labor market history. That produces earnings power; they go back to school in a field that is consistent with their current occupation, so their earnings potential is stronger.”
The third set of rankings looks at outcomes based on the quality of the student at the point of admission and after graduation. Students with high standardized test scores have a higher chance of succeeding, as do students who go on to pursue advanced degrees. That raises questions about whether colleges are due all the credit when high achievers make a lot of money. Graduate degrees, after all, lead to 28 percent higher earnings than bachelor’s degrees alone.
Although there are no clear-cut answers, researchers adjusted the final set of rankings to account for the difference in academic preparation and graduate degree attainment. They determined that former students at the University of Colorado-Denver make the most relative to what they’d be expected to earn given their level of academic preparation and graduate degree attainment. While those students’ expected earnings comes in at $47,600, the median earnings is $73,800.
“Maybe one of the reasons that Georgetown, MIT and Stanford come out high is because a high proportion of students from those schools go on to graduate school, so you may capture their earnings out of grad school which is going to be relatively high,” Carnevale said.
There is a prevalence of schools that focus on science, technology, engineering and math (STEM) majors, suggesting the earning potential for humanities majors is weak. Carnevale says the top 25 percent of earners with education degrees can expect to make as much as the bottom 25 percent of people with engineering degrees, even mid-career. Getting an advanced degree, he said, will improve educators’ prospects, but won’t do much to narrow the wage gap with engineers.
While the scorecard offers useful earnings data at the institutional level, students ultimately need more granular information to get a better sense of what they could make based on their degree. The Department of Education is working to add that sort of data in future versions of the scorecard, but in the meantime, families can find that information on state higher education websites.
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