Your English degree costs less than you paid for it – to subsidize engineering majors

The ever-increasing cost of college tuition is a contentious issue in the U.S., especially among millennials who feel forced to take on thousands in debt to compete for jobs.

A new study shows that not only have the costs of producing those degrees per student actually decreased since 1999, but also that colleges use less expensive degrees, such as English and business, to subsidize higher-cost degrees, such as engineering.

“The Costs and Net Returns to College Major,” by Joseph D. Altonji and Seth D. Zimmerman and published in the National Bureau of Economic Research, looked at 12 Florida public colleges and found an English degree cost an average of $34,656 per graduate, while an engineering degree cost about $62,297 per graduate. The median degree cost was $36,369 per graduate among roughly 164,000 students.

Most of the increased cost of majors like engineering are attributed to staffing costs, according to the study. The least expensive majors for colleges are library and archival sciences, business and protective services. Engineering, architecture and environmental design and physical sciences are the most expensive.

On average, Florida colleges studied spent about 16 percent less per credit hour in 2013 than they did in 1999. The average cost of out-of-state tuition in Florida in 2016 was $16,627 per year, or about $66,500 for a four-year bachelor’s degree.

“An analysis of staffing data for the University of Florida suggests that changes in faculty and staff inputs per credit can explain about half of the overall decline,” the authors wrote.

Altonji and Zimmerman then took that a step further, and found the average salary differences in those majors. They set what an education major makes to the baseline, or 0, and found an engineering major would make an average of $137,000 more than an education major by the time they were 55. An English and literature major, on the other hand, would make about $22,300 less than an education major by the same age. Those figures are based on Florida administrators’ earnings data.

The authors wonder in their conclusion if students or colleges would be better served adjusting tuition by major.

“A natural question is how changes to this cross-subsidy system would affect the private and public returns to higher education,” the authors wrote. “One approach would be to shift to major-specific tuition while keeping spending fixed.”

This story was originally published January 24, 2017 at 6:13 AM with the headline "Your English degree costs less than you paid for it – to subsidize engineering majors."