In the midst of back to school season, college planning is on the minds of millions. High school juniors and seniors are applying to college (or thinking about it) and freshmen are waking up to the reality of 8 AM classes.
If you have someone in your life who’s applying to college, or who’s undecided on a major, check this out. A recent post from 538 has some great insight into the importance of college planning and picking a major.
The link between education and earnings is notoriously fraught, with cause and effect often difficult to disentangle. But a look at detailed data on college graduates by major reveals some clear messages: Don’t be pre-med if you aren’t planning to go to medical school; don’t assume that all “STEM” — science, technology, engineering and math — majors are the same; and if you study drama, be prepared to wait tables.
For all the recent skepticism about the value of a college education, a bachelor’s degree is still “worth it” on average. In fact, according to a recent analysis by economists at the Federal Reserve Bank of New York, the average value of a college degree is near an all-time high, even factoring in rising tuitions.
Engineering majors hold 8 of the 10 highest earning slots, with humanities and arts majors tending to fill out the less lucrative end. However, one point to note is just how low-ranking one of the most popular majors today, Psychology, is. 3 psychology fields are among the 4 lowest paying majors.
538 indicates that while unemployment has been easing up, many graduates are finding themselves underemployed – working jobs that don’t require a degree.
Guidance in picking a major is something that a lot of young students could use. It’s especially relevant considering the state of the economy and the reality of student loan debt. Financial institutions can step up to help college students get a better understanding of the realities of the working world. If they can provide the info students need to make this really important choice, they can earn a customer for life.
College Planning and Financial Literacy: How Much Do Teens Know?
In the past we’ve covered the financial know-how of teens who will soon be off to college. The results? Teens are just “baseline proficient”. This proves to be a tough term to qualify. Moreover, we’re only talking about an average, so some are below the baseline and some are above. One thing’s for sure, teens know just enough to be dangerous.
Financial institutions should leverage their position to help young people make the best decisions possible. In grasping the social responsibility of financial education, FIs stand to benefit greatly. If you help a customer save money and avoid a mistake, they’ll stick with you through thick and thin.