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POLITICS: PennAve

The surprising college major many graduates now regret

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Politics,Education,Polls,2008 Financial Crisis,PennAve,Joseph Lawler,Economy,Federal Reserve,Student Loans,Higher Education

Lots of graduates don't think they got their money's worth. But none think they got a worse deal than computer science majors.

In a survey of Americans' personal financial situations released by the Federal Reserve Thursday, nearly half of the respondents who majored in computer science or information science said that the costs of college outweighed the benefits.

Fewer than a quarter said the benefits outweighed the costs.

Although the tech sector has been one of the few bright spots in the U.S. economy in the post-financial crash world, many students appear to think that studying the field was a losing proposition.

President Obama made news for criticizing art history degrees as impractical early in the year, but even humanities majors felt they got a better deal than computer science majors did, according to the survey results. The same was true for the social sciences, which includes majors often thought to be low-paying.



The best investment, on the other hand, appears to be a degree in engineering. The vast majority of engineering students thought that the costs of their education were worth taking on.

The Fed's survey overall indicates that loan payments are cutting into graduates' other spending priorities.

Almost half of people who have some student debt told the Fed that making payments on their college loans has led them to cut back in other areas. One in 10 said they had to reduce other spending by “a lot” over the past year to make student loan payments. People who have not completed their degrees found it even hard to keep up with loan payments without scaling back elsewhere.

The Fed’s survey, the Report on the Economic Well-Being of U.S. Households in 2013, was the first of its kind, and reported results about many aspects of Americans’ financial situations. It included over 4,000 respondents, but the number who reported college debt by field of study was much smaller, just 560.

Separately, the polling firm Gallup also released evidence Thursday that carrying student debt harms Americans’ well-being – not just financially, but perhaps even physically.

While 40 percent of respondents with no college debt told Gallup they were “thriving” financially, only 31 percent of those with student loans totaling under $25,000 did. Those with even more debt were less likely to be thriving.

A similar dynamic held for respondents’ physical well-being. Thirty-four percent of people with no student loans are thriving physically. Fewer people with student debt felt the same, including just 24 percent of those with over $50,000 in student debt.

The Gallup poll, conducted online with almost 30,000 respondents, is also the first of its kind.

Without historical data for comparison, it’s hard to tell in detail from either the Fed’s data or the Gallup survey how the recent run-up in student debt has affected Americans’ economic outcomes. It also can't be determined from the poll results whether student debt is making people struggle financially and physically, or vice versa.

The question of whether mounting student debt is slowing the economic recovery is one that top economic policymakers have weighed in recent months. In particular, Federal Reserve Chairwoman Janet Yellen has speculated that high student loan balances might be keeping young Americans from buying houses, slowing the housing recovery.

There is some data to suggest that people who borrowed for college have lagged in buying houses and cars following the recession.

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