What return-on-investment (ROI) does a liberal arts degree deliver? There has been a lot of hullabaloo lately about whether a bachelor's in English, or any other liberal arts degree, is worth earning. Forbes explained it like this:
"Humanities degrees have received a bad rap recently, even from President Obama. Many people, including top policy makers, routinely push policies to encourage more students to major in STEM fields (science, technology, engineering, and mathematics). Some governors have even suggested that state subsidies for public universities should be focused on STEM disciplines, with less money going to "less useful" degrees such as the humanities. Yet, in contravention to this perceived truth, the data show that humanities degrees are still worth a great deal."
How much are they worth? While working on a project to estimate the economic impact of his university, Professor Jeffrey Dorfman discovered bachelor's degrees in art, drama, English, French, history, philosophy, and political science have ROI of 300 to 700 percent for students (or parents) who spent about $80,000 on tuition, room and board, and other education-related expenses. Art majors had the lowest ROI and philosophy majors had the highest.
Make no mistake. There are bachelor's degrees with higher ROI. The top-paying majors include engineering, mathematics, physics, government, economics, international relations, geology, technology, and chemistry, according to Payscale.com. Classics majors, who earn even more than philosophy majors, came in at number 50 out of 130 majors listed by earnings potential.
Forbes offered some simple guidelines for students who are considering graduate school and want to evaluate whether the investment will pay off. Some suggestions for students are:
- Assume every dollar of debt will cost two dollars by the time it has been paid back.
- Estimate the cost impact of years in grad school on potential retirement savings.
- If undergraduate debt and grad school debt combined are higher than a conservative estimate of first-year salary, then the cost of education is too high.
- If debt is less than first-year salary, calculate lifetime earnings with and without grad school.
Most importantly, Forbes cautioned, it's important to remember that all projections could be wrong. A student may not find a job right away or the job found could pay far more than expected. Industries may become obsolete. Economies may falter. It's difficult to account for all of the variables that may affect income over a lifetime.