As Education Secretary Miguel Cardona observed recently, college graduates, on average, make about one million dollars more over their working careers than people who only have high school credentials.
I'm sure that's true, but that fact doesn't mean that all college programs lead to higher incomes or that all programs are reasonably priced.
Robert Kelchen, a professor at the University of Tennessee, Knoxville, performed a valuable service by creating a dataset that compares program-level debt with earnings outcomes for more than 45,000 postsecondary programs. This dataset calculates the debt-to-earnings ratio for students one year after they leave their respective institutions.
Obviously, this enormous dataset can be analyzed in many different ways. My brief analysis examined programs with the highest debt-to-earnings ratios--those that left former students with three times as much debt as their first-year earnings.
Forty programs are in this category, and all but six are graduate programs. Five Branches University, a private institution in California, tops the list with a debt-to-earnings ratio for its master's degree in Alternative and Complementary Medicine of more than nine to one. Its students leave the program with an average debt load of $144,276 and an average salary one year after leaving the school of only $16,011.
Second on the list, with a debt-to-earnings ratio of almost eight to one, is Bastyr University's program in Alternative and Complementary Medicine. One year after leaving the program, its former students have a median income of $22,411 and an average debt load of $175,690.
In fact, of the 40 programs with debt-to-earnings ratios of more than three to one, eleven are programs in alternative medicine, complementary medicine, or acupuncture.
Film, fine arts, and drama are also well-represented among programs with high debt-to-earnings ratios. Of the 40 programs with debt-to-earnings ratios of more than three to one, thirteen are fine arts, film, or drama programs.
Professor Kelchen's database prompts this question. How much should students borrow to fund their education?
Camilo Maldonado, writing for Forbes, recommends a borrowing limit of no more than two-thirds of a graduate's expected starting salary. Thus, if you expect your starting salary to be $50,000, you should borrow at most about $33,000.
Applying that formula to Professor Kelchen's database, students graduating from almost 4,000 academic programs are leaving school owing more money than they can comfortably pay back.
As Maldonado pointed out, the federal student loan system is designed to lend students potentially more money than they can repay. The colleges don't care how much debt their students amass to finance their studies.
On the contrary, students must decide for themselves how much college debt is prudent to accrue. Unfortunately, as Professor Kelchen's database makes clear, a great many students are not making that calculation.
In his commentary, Maldonado reminds us that the price of a college education is increasing almost eight times faster than wages. Thus, Maldonado warns, "This means that overpaying for an education is becoming increasingly disastrous."