Business Majors at Flagship Universities See Dwindling Returns
(Bloomberg) -- Higher tuition costs aren’t paying off for business majors.
As tuition costs at public universities have increased, earnings prospects for recent graduates with a bachelor’s degree in business administration haven’t kept pace, according to recently released data from the U.S. Census.
Recent business graduates from four public flagship universities were less likely to get a job that could cover their student loans than their counterparts more than a decade ago.
The U.S. Census Bureau has provided entry-level earnings data for students who graduated from the following four public universities with an undergraduate degree in business administration between 2001 and 2015: University of Colorado, University of Michigan, University of Texas and University of Wisconsin.
The students who graduated from the four schools between 2013 and 2015 with a business degree were likely to find a job that earned them on average $58,942 annually, which is roughly equivalent to paying for one four-year degree.
Compare that with the cohort of students who graduated between 2001 and 2003 and whose entry-level jobs were likely to pay them enough to attend a four-year college twice.
But not every public university is equal. These institutions vary by acceptance rate, graduation rate and tuition costs, among other things. The University of Texas was likely the best bang for a student’s dollar.
Business graduates at UT had the highest entry-level earnings relative to the tuition paid among the four universities for which wage data was available. This was true for both sets of graduates.
The University of Colorado on the other hand appears to have become less affordable for business graduates. Back in 2001, the university’s business grads were earning enough right out of college to pay for two four-year degrees -- the second-best ratio among the four institutions. But for the most recent graduates, the school dropped to the bottom with the lowest earnings-to-tuition ratio.
University of Michigan students had the best paying jobs right out of college but they also paid the most in tuition. However, graduates from the Michigan business school can reap the rewards in 10 years-- the average earnings a decade after graduation for 2004 to 2006 business administration majors was $160,677.
These schools provide just a snapshot of what the labor market looks like for U.S. college graduates. A broader measure of wages shows that young adults are making less now compared with entry-level graduates 30 years ago, according to research by the Federal Reserve Bank of New York.
Last year, recent college graduates -- those between the ages of 22 and 27 -- earned $44,000 in 2018, while their counterparts earned $44,926 in 1990. Annual wages are expressed in constant 2018 dollars.
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