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Here are the best and worst college degrees based on return-on-investment.
A new Bankrate study that estimates how long it would take to repay student loans according to career choice should help parents and students looking to invest those college dollars wisely.
With Friday’s jobs report showing an uptick in the unemployment rate to 7.6 percent. students and parents need to put extra thought into which majors will offer the best prospects and return on investment after graduation.
Bankrate.com ranked 20 popular careers and related majors according to their median compensation and the amount of time it would take to repay student loans for each.
Jessica Patel, a personal finance analyst at Bankrate.com, said this was the first time the financial website had conducted such a study. Bankrate.com used the most recent data from the national Center for Education Statistics and the Bureau of Labor Statistics.
“With student loan rates as high as they are now and student loan debt increasingly growing, we wanted parents and children to have a tool for the best jobs for the money,” Patel said.
In July, federal Stafford loan interest rates are expected to double to 6.8 percent. The average amount of debt from the college class of 2013 is $35,200, according to Fidelity.
After studying 20 popular careers, Patel said so-called “stable” careers, such as doctor or lawyer, often failed to offer a higher financial return, because of their higher educational costs.
“You don’t need a graduate degree or don’t need to go to school for as long as you think to have a well-paying job,” she said.
A job in advertising or marketing, which does not require a post-graduate degree, was the career with the least amount of time to repay student debt. Assuming that 10 percent of one’s salary goes toward repaying school loans, a median salary of $107,950, a total higher education cost of $52,596 (tuition, fees, room and board) and a 6 percent student loan interest rate, it would take 5.83 years to repay student debt.
Of the 20 careers, the job with the longest loan repayment time was marriage and family therapist, which requires about two years of graduate school. Assuming a salary of $46,670, it would take about 34.67 years to repay student debt in that field.
Here are 20 popular career choices analyzed by Bankrate.com.
Minimum required years of higher education: 4
Cost of degree: $52,596