- Some students achieve returns exceeding $1 million on their college investment, demonstrating that some schools and majors offer higher earning potential than others.
- Although many positions employ both college graduates and non-college graduates alike, significant pay disparities exist, even for those performing the same job.
- One in three employers have eliminated degree requirements from job descriptions, indicating that forward-looking organizations are shifting to a skills-based hiring strategy.
SEATTLE, July 10, 2024 (GLOBE NEWSWIRE) -- Today, Payscale Inc., the leading provider of compensation data, software and services, released its 2024 College ROI Report, ranking the best-value colleges based on median salary by mid-career, minus the cost of attendance. In tandem, Payscale is releasing its first College Impact on Compensation Report that examines differences in pay between college graduates and non-college graduates. The new research found that a college education remains a competitive advantage for job seekers, while those without a degree may face substantial pay inequities, even for positions where a degree is not required.
“Despite the skyrocketing cost of tuition and dwindling enrollment numbers, our data shows that a college degree is still valuable in today’s job market based on better salary outcomes,” said Amy Stewart, Principal, Research & Insights at Payscale. “However, there are alternative paths to earning a high salary through acquiring knowledge and skills that employers are increasingly acknowledging. Some career paths still require a formal education, and college can provide value beyond earning potential alone, but prospective students need to make strategic choices to avoid underemployment and debt they can’t easily pay off.”
Key takeaways on the value of a college education:
The top-ranked school that delivers the best value for a bachelor’s degree is Harvey Mudd College, with an ROI over 20 years of $1,426,000 in earnings at the median.
- While Harvey Mudd boasts the highest net ROI for private institutions, Brigham Young University-Idaho has the highest annualized rate of return at 14%.
- The United States Merchant Marine Academy tops the list of military service academies with a 20-year net ROI of $1,352,000 and an annualized return of 22%.
- SUNY Maritime College is the top public university; in-state students can expect an ROI of 13% each year after graduation and $1,229,000 in net ROI.
College graduates earn 37% higher salaries than non-graduates in 2024, consistent with the trend observed since 2010 — indicating that there hasn't been a decline in the pay premium for college degrees.
- Workers with a bachelor’s degree take home $78,400 per year at the median — that’s $29,000 more than those with only a high school diploma, who earn a median salary of $49,400.
- College grads with a STEM (science, technology, engineering, and mathematics) degree earn the most compared to other majors.
- The highest-paying jobs for bachelor's degree holders are in technology, engineering, and digital marketing; graduates in these roles are making up to $124,000 at the median.
In jobs where both college graduates and non-college graduates are hired, there can be wide pay disparities of more than 30% — suggesting possible inequities that unfairly favor those with a degree.
- Operations Team Leader is a job held by an even mix of college graduates and non-college graduates; yet someone with a bachelor’s degree makes 31% more at the median than someone doing the same job without a bachelor’s degree.
- Merchandising Managers with a college degree outearn those without a college degree by 53% at the median — a pay differential that is questionable at best.
- Additional roles with excessive pay disparities include leadership positions like Team Leader and General Manager and specialized roles like Sales Specialist and Mechanical Engineer.
To combat potential inequities, a growing trend among employers involves eliminating college degree requirements from job descriptions along with the pay premiums that go with them.
- According to Payscale’s 2024 Compensation Best Practices Report, only 16% of organizations compensate more for a bachelor’s degree.
- One in three (34%) organizations have removed degree requirements from job descriptions to consider all applicants with the necessary skills and experience.
“Complex jobs involving significant responsibility and risk are more likely to require a college degree, but we're also seeing some positions where degree requirements may be antiquated or arbitrary, leading to unjustifiably wide pay gaps between degree holders and non-degree holders,” said Ruth Thomas, Pay Equity Strategist at Payscale. “Employers must be careful about rewarding graduate premiums where a college degree is not required as this can lead to inequities, especially in the age of pay transparency. Skills-based hiring is a more equitable practice that can expand talent pools and alleviate labor shortages.”
Every organization needs a clearly articulated approach to compensation that transparently rewards compensable factors in a consistent and legally defensible manner. Evaluating precisely how education, experience, and abilities are valued in specific jobs is streamlined with the support of compensation technology and data. Payscale’s advanced compensation management software like Payfactors and MarketPay, robust data sources including the world’s largest employee-reported database, and managed services for compensation strategy and pay structures make it easier than ever to prepare for equitable skills-forward hiring.
Payscale’s College ROI Report rankings comprise over 15 years of data from 1.9 million college-educated workers who completed Payscale’s free online salary survey between January 2007 and May 2024. Data from the Integrated Postsecondary Education Data System (IPEDS) produced by the National Center for Education Statistics (NCES) is used to calculate the investment needed for college. Payscale’s College Impact on Compensation Report analyzes crowdsourced data from 380,513 U.S. workers who took Payscale’s free online salary survey between May 2022 and May 2024.
Prospective college students and parents can access the full College ROI Report, complete with breakouts for the best value colleges for individual states, school types, majors, and jobs at Payscale.com/college-roi.
For more insights from the College Impact on Compensation Report, including a list of jobs with the highest pay differentials between college and high school graduates, visit Payscale.com/research-and-insights/college-impact.
For a deeper dive into best practices on managing pay differentials for education and advice on how to shift toward a skills-based workforce, employers can download the free HR guide here.
About Payscale
As the industry leader in compensation management, Payscale is on a mission to help job seekers, employees, and businesses get pay right and to make sustainable fair pay a reality. Empowering more than 50% of the Fortune 500 in 56 countries, Payscale provides a combination of diverse and dynamic data sources, experienced compensation services, and scalable software to enable organizations such as Angel City Football Club, Panasonic, Mars Global, eBay, American Airlines and PetSmart to make fair and appropriate pay decisions.
Pay is powerful. To learn more, visit www.payscale.com.
Contact: Press@Payscale.com
