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Now, more than ever, students must evaluate the return on investment of their degrees, which includes considering the potential salary those degrees can yield. Financial firm Earnest analyzed data to rank the graduate degrees that offer the fastest financial payoff.
Earnest examined data to determine which degrees resulted in the highest and lowest student debt, then compared those findings to average post-graduation earnings. The analysis included fields like MDs (medicine), DDS (dentistry), Pharm D (pharmacy), MBAs (business administration), JDs (law), Masters in Science or Engineering, and Masters in Arts. While some degrees may take longer to pay off, they focused on those that allowed students to recover their debt more rapidly.
Earnest calculated a debt-to-income ratio for each degree by dividing the average debt by the average (self-reported) income. A ratio under 1 means respondents earned back their degree’s cost in less than a year, while a ratio above 1 suggests the degree cost more than the average starting salary. MBAs had the lowest debt-to-income ratio, followed by Masters in Science or Engineering. This indicates these fields allow workers to pay off their debt more quickly, based on average debt and income levels. Here are their findings:
It’s important to note that this is a broad overview based on self-reported salary data, so consider the numbers accordingly. Many factors play a role in this analysis, and Earnest also found that the reputation of the school made a significant impact:
Professionals graduating from higher-ranked schools typically start their careers with lower debt in relation to their income, and this pattern tends to persist even ten years after graduation. However, medical professionals are an exception, as their debt-to-income ratio remains similar regardless of their school’s standing. In terms of student debt, all medical degrees are essentially the same.
Their comprehensive study is definitely worth exploring, so be sure to check out the full article through the link below.
