We recently wrote about how earnings expectations among bachelor’s degree prospects soar above reality. In 2023, for example, Gen Z students expected to make more than $84,000 one year after completing their degrees, while the actual median earning for bachelor’s holders was about $44,500. These unmet expectations, realistic or not, can sour consumer opinion.
Our guidance? Colleges and universities need to play an active role in setting realistic expectations for students to counter the narrative of declining value. To begin this effort, we first need to understand what the bachelor’s earnings story really is.
Focus on the Long Game… and Early Successes
Unrealistic earnings expectations diminish the real, positive earnings story for many bachelor’s completers. Indeed, over time, there is no question that more education pays off.
The Bureau of Labor Statistics reports that median usual weekly earnings for workers aged 25 and older with a bachelor’s degree is $1,493 (or almost $78,000 in annual earnings). That’s about 40% higher than associate degree holders ($1,058), more than 50% higher than some college/no degree holders ($992), and over 65% higher than those with only a high school diploma ($899).
Like most investments, it takes time to pay off.
We can turn to the College Scorecard, however, to see the more immediate earnings story for bachelor’s completers from one- to five-years post degree completion. For example:
- Fast earnings growth. For all bachelor’s degree completers, median annual salaries grow by 40% (around $18,000) from one- to five-years post degree completion (adjusted for inflation).
- Beating most other credentials. This 40% salary growth beats all sub-bachelor’s credential earnings and only lags the earnings growth experienced by first-professional degree completers (48%).
- Boosted earnings power. The median bachelor’s degree holder makes 6% more than their associate degree holding peers one-year post completion. Five years after program completion, bachelor’s earnings stand at 28% above associate degree earnings ($62,502 vs. $48,784).
- Improvement on income-to-debt. The median bachelor’s completer’s income to debt ratio grows from 1.8 (salary is 1.8 times their debt load) one-year post completion to 2.6 five-years post completion.
This data helps illustrate some of the successful outcomes for bachelor’s degree completers. It also shows that it doesn’t take a lifetime to see how the bachelor’s earnings trajectory deviates from other undergraduate credential outcomes.
The Field of Study Angle
Of course, field of study plays a significant role in the outcomes story, and the benefit of College Scorecard data is that it reports earnings by undergraduate major— rather than by the bachelor’s completer’s job. This is particularly useful for understanding outcomes for majors where program-to-career articulation is more nebulous. For example, the author of this article majored in history but is not a practicing historian. Rather, he has spent time as a high school teacher, public policy analyst, and higher education market researcher.
To examine some earnings data by field of study, let’s focus on five broad fields: business, health, engineering, biological/biomedical sciences, and computer and information sciences. These fields have seen considerable growth at the bachelor’s level in recent years, and the bachelor’s market has intensely consolidated around these fields across several demand metrics.
For example, as Eduventures’ 2024 Bachelor’s Market Update reported, about 49% of high school-aged college-bound prospects expressed interest in these fields, as did about 49% of prospective students’ parents. So, prospective student field of study interest, as influenced by their parents, has led to bachelor’s market concentration. As of 2023, 49% of all bachelor’s conferrals were reported in these five fields. In other words, the Big Five Fields alone represent about half of the bachelor’s market.
Are earnings outcomes fueling these trends?
Figure 1 details earnings for bachelor’s completers from the Big Five Fields of study one-year post bachelor’s completion.
Figure 1
As we can see above, all but one of the Big Five Fields (biological/biomedical sciences) beat the overall average for one-year bachelor’s median earnings. Engineering, with the highest earnings of all fields, not just these five, sees five-year earnings about 51% higher than the all-field benchmark. Biological/ biomedical sciences, on the other hand, is just 81% of the all-field benchmark.
To understand earnings outcomes as a demand driver at a deeper level, Figure 2 plots all broad (two-digit CIP codes) fields of study by two metrics:
- Average median value of earnings five-years post bachelor’s completion
- Income-to-debt ratio five-years post bachelor’s completion
Within this view, the Big Five Fields of study are specifically called out and plotted against overall market benchmarks.
Figure 2
All of the Big Five Fields report median five-year earnings above the overall bachelor’s benchmark ($62,502). Of these, engineering reports the highest, at over $94,000. Computer and information sciences’ five-year earnings are close to $80,000, business and biological/biomedical sciences is around $69,000, and health is close to $64,000. Figure 2 also shows that biological/biomedical sciences’ median earnings jump by over $30,000 from years one to five post-completion – the largest gain of any field of study – potentially helping students overlook the below average first-year earnings (and likely telling a story about graduate school).
Debt relative to earnings provides a better value metric than earnings alone. The income-to-debt ratio for all bachelor’s holders after five years is 2.6. This means that, overall, bachelor’s completers’ annual five-year earnings are 2.6 times their debt load at graduation.
Four out of the five major fields outperform the market with better income-to-debt ratios than the average. Engineering again ranks the best of the five with a ratio of 4.0. Next comes biological/biomedical sciences with 3.3, business with 2.8, and computer and information sciences with 2.7. The health field has an average income-to-debt ratio of 2.5.
Another benefit of College Scorecard data is the ability to get more granular and look at fields of study through the four-digit CIP code view. For instance, if we were to isolate the more granular nursing subfield under health, by far the most popular health field among traditional-aged college-going students (45% of college admits interested in health reported interest in nursing specifically according to Eduventures’ Admitted Student Research™), five-year earnings move to over $83,000 and the income-to-debt ratio improves to 3.0.
Clearly, there are some strong earnings stories for the Big Five Fields that help explain market movement over the last decade.
The Bottom Line
Understanding the current earnings landscape is the first step in setting realistic earnings expectations. To help counter the narrative of declining value, colleges and universities must be equipped with data to share more success stories. These stories could be bachelor’s earnings versus other undergraduate credentials over time or specific fields of study outperforming others in earnings and value.
This Wake-Up Call serves as a preview for Eduventures’ 2025 Bachelor’s Market Update – a report designed to view how the bachelor’s market has developed over the last decade through the lens of outcomes data. The report explores the data previewed above in more depth, including more granular fields of study analysis, and serves as a resource to help future bachelor’s program planning with these outcomes in mind.
