Why a $50,000 Salary Is Critical for Public-University Graduates
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What is the main topic discussed in this episode?
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
Here's your money briefing for Tuesday, May 28th. I'm J.R. Whelan for The Wall Street Journal. Landing your first job out of college is important, but so is the salary.
What new research says about the $50,000 benchmark for public-university grads?
For students graduating from public universities, the magic number is $50,000 a year.
They need to make that number in order for their degree to pay off, for them to be able to pay off any loans they have, and for them to get a good return on their investment that they paid for their education.
Wall Street Journal reporter Alyssa Luckpat will join us after the break.
This episode is brought to you by Charles Schwab.
Which types of public universities are included in Strada’s analysis?
Decisions made in Washington can affect your portfolio every day. But what policy changes should investors be watching? Washington Wise is an original podcast from Charles Schwab that unpacks the stories making news in Washington right now and how they may affect your finances and portfolio. Listen at schwab.com slash Washington Wise.
New research shows making $50,000 a year is a critical milestone for graduates of public universities. Wall Street Journal reporter Alyssa Luckpat joins me.
Why does earning $50,000 over a decade matter for degree return on investment?
Alyssa, what type of public universities are we talking about?
We're talking about state schools that offer four-year accredited bachelor's degrees. So, for example, the University of Michigan, the University of Utah, the University of Houston.
Why is $50,000 such an important number?
According to research from the Strada Education Foundation, new graduates need to make at least $50,000 a year on average in their first decade after college. So that equates to $500,000 before taxes over 10 years.
But why is that number so important?
They need to make that number in order for their degree to pay off, for them to be able to pay off any loans they have, and for them to get a good return on their investment that they paid for their education.
How do public vs. private tuition and room-and-board costs compare?
What's the comparison between public university tuition and fees and those at private nonprofit schools?
Strata found that the median in-state public college tuition and fees in the U.S. is $8,000 a year, and then room and board is $11,000, whereas at private nonprofit universities, the median tuition and fees is more than $30,000, and that doesn't include room and board.
That is a big difference.
Yeah. And the private nonprofits, the data isn't all centralized for room and board, so we don't have a number for that. But even just the tuition and fees is significantly higher.
How long do grads have to make $50,000 per year to make their degree cost effective?
They need to do that in the 10 years after school. So if they don't make $50,000 in their first year, but within the 10 years after graduating, if they make $500,000 in total before taxes, then they'll meet that benchmark we're talking about.
So $50,000 is not to be able to afford to live. It's to then go back and be able to financially account for all you spent on college.
Correct. So even in states or cities that have a really high cost of living, that's the number you need to meet.
What factors help public-university grads reach $50,000 (internships, geography, majors)?
What can students from public and state schools do to ensure that they can find a job that pays at least $50,000?
Strata said that public university alumni are more likely to get jobs that pay well if they've had access to college internships, career coaching, and strong job markets.
Oh, so geography plays a role here.
It does. So if they're in a place where they had access to good jobs, they're much more likely to meet that $50,000 number and then be able to get a good deal on their education.
What areas of the country offer a better return on investment?
According to Strada, states like Arizona, California, New York, Illinois, North Carolina, Washington, Maryland, around 80% of young professionals get a positive return on their investment, even if they're in places with higher costs of living.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–0:30
2
What new research says about the $50,000 benchmark for public-university grads?
0:30–1:02
3
Which types of public universities are included in Strada’s analysis?
1:02–1:40
4
Why does earning $50,000 over a decade matter for degree return on investment?
1:40–2:23
5
How do public vs. private tuition and room-and-board costs compare?
2:23–3:35
6
What factors help public-university grads reach $50,000 (internships, geography, majors)?
3:35–7:14
7
How should prospective students weigh cost, debt and the decision to attend college?
7:14–7:53
Speakers
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