Salary Expectations | Salary Expectations by Major | Salary Expectations by Gender | Securing a Job | Job Market Predictions | Salary Satisfaction | Student Debt vs. Earnings | College Regrets | Pandemic Affects Career Planning
💰What is the average starting salary for college graduates? 💰
The average starting salary for college graduates is $55,260, but current college students expect to make nearly $104,000 in their first job.
In the coming weeks, millions of college students will step across the commencement stage and into the “real world” to begin their careers. Eager to leave the days of eating ramen behind, undergrads want to land lucrative jobs.
Soon-to-be graduates will enter a job market rapidly recovering from the COVID-19 pandemic. Job openings hover near record highs, and desperate employers are raising pay to entice top talent amid ongoing labor shortages.
Yet the strength of the economy has likely inspired unrealistic salary expectations that will leave students disappointed. To learn more about their salary expectations, we asked 1,000 undergraduates pursuing a bachelor’s degree about their financial situation, college experience, and the job market.
We learned that undergraduate students across all majors and institutions overestimate their starting salaries by 88%. When faced with reality, however, nearly 1 in 3 undergrads (31%) think they won’t make enough money to live comfortably after graduation.
🤑 College Student Salary Expectations Statistics
- College students expect to make $103,880 in their first job, but the average starting salary is actually only $55,260.
- Women expect to earn 0.5% less than men with similar degrees right out of college.
- The gap widens to 4.3% within 10 years of graduation, when women expect to make $195,000 — $8,740 less than men.
- 33% of students attend college to make more money in their future careers, while 30% want to study a subject they’re passionate about.
- Just 15% of students graduating in 2022 have accepted a job offer.
- Among students who have jobs lined up after graduation, only half (51%) are satisfied with their starting salaries.
- Nearly 1 in 3 students (31%) doubt that they’ll make enough money to live comfortably after graduation.
- Fewer than half (48%) of students believe college is worth the debt, and 40% regret attending.
- 43% of respondents will graduate with at least $30,000 or more in student debt, with nearly 1 in 3 (29%) graduating with $50,000 or more.
- About two-thirds (63%) of students believe it will take them 10 years or more to repay their student loans, and 1 in 7 don’t think they’ll ever pay them off.
- Fewer than half of students (49%) feel prepared for their postgraduate careers, with 1 in 6 saying they feel very unprepared.
- As a result, 81% of students feel negative emotions, such as stress and anxiety, about graduating and joining the workforce.
- 78% of students believe that internships will have some impact on their starting salary, but nearly half (48%) say they lost opportunities to participate in internships, work-study programs, and student organizations because of the pandemic.
College Students Overestimate Their Postgraduate Starting Salaries by $50,000
Compensation rates have soared as employers raise salaries to attract top talent amid a competitive labor market. However, 90% of college students have seriously overestimated what they’ll make at their first entry-level job.
The average starting salary for recent graduates is $55,260, but students expect to earn almost double that — $103,880 — one year out of college. That’s nearly $46,000 more than they expected to make just three years ago.
Graduates may be in for a rude awakening: More than half (58%) say the average starting salary of $55,260 isn’t as high as they expected, with nearly 1 in 5 (18%) saying it’s much lower than expected.
Unrealistic salary expectations also extend to mid-career earnings. Ten years into their careers, students anticipate making $200,270 — a 93% increase from their starting salary expectations.
For example, a single adult would need to earn at least $74,282 in after-tax income to live comfortably in San Francisco, while a single adult would need to make $66,214 to live in New York City.
Journalism, Humanities Students Have the Most Unrealistic Salary Expectations
When choosing a course of study, most students follow the money. The No. 1 reason students attend college is to earn higher wages in their careers (33%), compared to 30% who say they want to study a subject they’re passionate about.
The key to earning a good salary is to choose the right degree program, according to 81% of students who think their major impacts how much money they’ll make in their first job.
High salary expectations are common among students of all majors, but those studying journalism, psychology, and liberal arts are the most likely to overestimate the value of their degrees. Journalism students, in particular, are the most delusional, expecting $107,040 just a year after they graduate — 139% more than the median journalist’s starting salary.
Meanwhile, computer science majors have the most realistic expectations, overestimating their starting salary by only 27%.
Women Expect to Earn Less Than Men
Despite well-documented research on the gender pay gap, nearly 1 in 4 students (24%) believe gender has no impact on an employee’s starting salary.
Not surprisingly, men are 14% more likely to say gender does not impact starting salaries. Meanwhile, women — who earn 80 cents to every dollar a man makes — are 4% more likely to say it’s a legitimate problem.
Gender-based salary differences may result in lower salary expectations among women. On average, women anticipate earning $103,550 at graduation — 0.5% less than men.
The gap widens to 4.3% within 10 years of graduation, when women expect to make $195,000 — $8,740 less than men.
Many argue that the gender pay gap persists because women are overrepresented in lower-paying jobs. We found, however, that women often expect lower pay in the same professions, including those traditionally dominated by females.
For example, women outnumber men in the psychology field, but they anticipate about $12,000 less than men in annual salary.
Although women have increased their presence in higher-paying jobs, they’re still promoted to leadership roles at much lower rates, likely causing the growing rift in mid-career salary expectations between women and men.
Salary discrepancies are even greater among women and men of color, with Black respondents expecting mid-career salaries of 1.7% lower than white respondents.
85% of Students Graduating in 2022 Don’t Have Jobs Yet
Just 15% of students graduating in 2022 have accepted a job offer — most of those students possess in-demand degrees such as finance and education.
Thanks to a hot job market, however, 44% of graduating students say the job search is progressing easier than expected. Students who don’t have jobs lined up are optimistic about their prospects and expect to find a job within three months or less after graduating.
Half of students (50%) are confident they’ll find a job related to their major.
Nearly 45% of Job Seekers Expect the Hiring Market to Improve
Students graduating in 2022 have a strong job market awaiting them, with employers planning to hire nearly 27% more graduates from the class of 2022 than they did from the class of 2021.
Hiring managers are scrambling to attract workers by offering higher pay that’s reinforced students’ sky-high expectations. But economists question how long the labor market can sustain its momentum.
About 44% of students who aren’t graduating in 2022 think that by the time they toss their caps, the job market will be even better than it is now. Once again, students’ expectations may be out of touch with reality.
Although the job market has rebounded from the coronavirus-induced recession — adding at least 400,000 jobs for 11 straight months — job growth in March 2022 increased at the lowest rate since September 2021.
Economists also warn that the Federal Reserve’s decision to raise interest rates to fight rampant inflation may slow the overall economy. As a result, hiring may decelerate to a more sustainable pace and normalize in the latter half of 2022.
Half of Students With Jobs Lined up Are Dissatisfied With Their Starting Salaries
Disappointment is inevitable when undergrads leave university with unrealistic salary expectations. Among students who have jobs lined up after graduation, only half (51%) are satisfied with their starting salaries.
When reality sinks in, about 1 in 3 students (31%) doubt they’ll make enough money to live comfortably after graduation. The most common fears include:
- Inability to afford basic expenses (30%)
- Inability to do “fun” things (29%)
- Having to work a second job (29%)
- Inability to pay off student loans (29%)
- Taking on credit card debt (29%)
Approximately 1 in 8 students say they won’t compromise their salary expectations for any reason, especially when it may take years to make up lost earning power. Others fear burnout if they’ll need to work a second job to make ends meet.
Not everyone has the savings or family support to wait for a high-paying job when rent, bills, and student loans are due. Although a good salary is a top priority for soon-to-be graduates, students may be willing to accept a lower salary if the job comes with perks such as:
- Great benefits (39%)
- A desirable location (31%)
- Remote work options (30%)
Fewer Than Half of Students Believe College Is Worth the Debt
Nearly 43 million Americans have federal student loans totaling $1.57 trillion, with the average undergraduate carrying about $30,000 in student debt. However, 43% of our respondents have more than that amount, including nearly 1 in 3 students (29%) who will graduate with $50,000 or more in debt.
The standard student loan repayment plan lasts 10 years, but it could take longer if students’ salaries are lower than expected. About two-thirds of students (63%) believe it will take 10 years or more to pay off their loans, while 1 in 7 (14%) don’t think they’ll ever pay off their student debt.
The rising costs of college can cause financial hardship for students as they try to build their lives.
More than half of undergraduates (55%) work a full- or part-time job to support themselves through school, but doing so takes up time they could otherwise spend in study groups, internships, or student organizations related to their future careers.
Approximately 45% of students say they’ve lost opportunities to participate in internships, work-study programs, and student organizations because they have to work.
Even with income from a job, 3 in 5 undergrads (59%) have had to take on additional debt, including more student loans than expected (30%), credit card debt (28%), and personal loans (27%).
College is expensive, but most experts agree it’s still a smart investment because it leads to higher earning power. In 2020, individuals with a bachelor’s degree earned $34,000 more than those with just a high school diploma.
Yet nearly half of students disagree — 48% believe college isn’t worth the debt.
Return on investment is largely dependent on the degree students choose to pursue. In a study of 40,000 undergraduate programs, the think tank Third Way found that graduates in 25% of programs — primarily in fine arts — do not recoup their costs within 20 years of graduation. About 1 in 6 programs show no return on investment at all.
As wages rise, however, the gap between college costs and starting salaries is starting to close. From 2015–2020, college costs increased 7%, while starting salaries rose slightly higher at 9%. This gap may be even closer in 2022, as starting salaries continue to increase in the current job market.
40% of Students Regret Attending College
Lacking comprehensive information about employment opportunities, earning potential, and the long-term implications of student debt, many students feel remorse about attending college.
One of the most common regrets students have is accumulating too much student debt, especially for a degree that doesn’t translate into a well-paying job. As a result, fewer than half of students (48%) believe that college is worth the cost.
If they could do it over, 40% of students would choose a different major — perhaps one with stronger job prospects and higher starting salaries. Additionally, 41% would choose a different college with lower tuition costs, more career resources, or better academic programs.
Despite paying such a large sum for their education, fewer than half of students (49%) feel prepared with the knowledge and skills needed for their postgraduate careers. Approximately 1 in 6 say they feel very unprepared.
Students enter the workforce feeling less than optimistic. In fact, 81% feel some negative emotions about graduating and joining the workforce, with nearly 1 in 5 (19%) expressing only negative emotions.
1 in 3 Students Say the Pandemic Negatively Affected Their College Experience
Even before the COVID-19 pandemic, paying for college was a struggle. When the pandemic hit, many young college workers lost their jobs and a means of paying for their education.
Rather than pay thousands of dollars for scaled-back educational and social experiences, many students decided not to return to college. Undergraduate student enrollment has dropped 6.6% since 2019, leading to 1 million fewer students enrolled in U.S. colleges and universities than before the pandemic began.
Undergraduates who continued their education lost out on face-to-face instruction, hands-on labs, and in-person career services, which may have negatively impacted learning and opportunities for career growth.
Among students who stayed in school:
- 34% say the pandemic negatively impacted their job opportunities.
- 34% say the pandemic negatively impacted their social skills.
- 32% say the pandemic hindered their ability to get an internship.
Pertinent work experience is critical to landing a job in today’s hiring market. Not only do internships provide students with the technical skills needed to succeed in their industry, they also allow participants to hone their social skills and connect with co-workers who can provide valuable references.
Yet nearly half of students (48%) say they lost opportunities to participate in internships, work-study programs, and student organizations because of the pandemic.
In 2020, half of all internships were canceled. Competition was fierce the following year, as those who failed to secure an internship in 2020 competed with a new class of students for a limited number of positions. By spring of 2021, only 22% of college students had worked an internship, and only half worked in person.
Approximately 78% of students believe that failing to secure an internship will have some impact on their starting salaries.
The proprietary data featured in this study comes from an online survey commissioned by Real Estate Witch. One thousand people who identified as college students pursuing a bachelor’s degree were surveyed March 23-26, 2022. Each respondent answered up to 21 questions related to their financial situation, college experience, and the job market.
About Real Estate Witch
You shouldn’t need a crystal ball or magical powers to understand real estate. Since 2016, Real Estate Witch has demystified real estate through in-depth guides, honest company reviews, and data-driven research. In 2020, Real Estate Witch was acquired by Clever Real Estate, a free agent-matching service that has helped consumers save more than $82 million on realtor fees. Real Estate Witch’s research has been featured in CNBC, Yahoo! Finance, Chicago Tribune, Black Enterprise, and more.
What is the average starting salary for college graduates?
The average starting salary for recent college graduates is $55,260, but students expect to earn almost double — $103,880 — one year out of school. Learn more.
Which students have the most realistic salary expectations?
Computer science majors have the most realistic expectations, overestimating their median starting salary of $75,100 by only 27%. Learn more.
Which students have the most unrealistic salary expectations?
Students studying journalism, psychology, and liberal arts are the most likely to overestimate the value of their degrees. Journalism students in particular are the most delusional, expecting $107,040 annually — 139% more than the median journalist's starting salary. Learn more.
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