Why It Matters Where You Go to College as a STEM Major

Think it doesn't matter where you study engineering or computer science since all STEM majors make big bucks?

You may have gotten that impression from recent studies and advice suggesting that techies do well no matter where they attend college.

Eric Eide and Mike Hilmer, economics professors at Brigham Young University and San Diego State University, respectively, reported in a June 2015 paper that, for STEM majors, the prestige of a school doesn't play a significant role in boosting salary. "It largely doesn’t matter whether students go to a prestigious, expensive school or a low-priced one—expected earnings turn out the same," they concluded in a Wall Street Journal article in January.

However, a Money analysis of the earnings of students who majored in science, technology, engineering, and math found there is actually a wide variation and that some colleges are more likely to produce dropouts or debt-laden graduates than Silicon Valley success stories.

According to PayScale.com data, the average salary of recent graduates (defined as those who graduated within the last five years) who majored in science, technology, engineering, or math is more than $51,000. However, there were more than 40 schools on its list where graduates earned an average salary below $40,000.

"Where you go matters a lot less than people think...[but] it does matter," says Anthony Carnevale, director of Georgetown University's Center on Education and the Workforce. "If you’re going to study STEM, schools like MIT or Carnegie Mellon University—those are the places you want to go because they have higher graduation rates, and more money is spent on you, and you have more access to graduate schools."

Indeed, the numbers show that, even if you're a STEM major, the decision about which college to attend could be crucial not only in terms of your future earnings but in the amount of debt you'll carry after you graduate—and even your likelihood of graduating at all.

Despite all the hype these days, STEM graduates aren't necessarily guaranteed a high early-career salary. STEM alumni of Alverno College in Milwaukee report making an annual salary of just $34,600. That's almost $2,000 less than the national average early-career earnings of dance majors. Similarly, STEM graduates at Oklahoma Panhandle State University earn just $40,300 within five years after graduation—about $10,000 below the national median for STEM majors.

What's more, the glowing statistics about STEM earnings are inflated because they look only at graduates. But at many schools, most freshmen flunk out. For instance, graduates of Bloomfield College, a four-year private liberal arts school in New Jersey, report making an average of $69,300 within five years of graduation. But only 32% of the college's students will graduate within six years.

"If you start by looking at graduates, you’ve already missed so much about what happens to students after they enroll," says Jordan Matsudaira, a professor of policy analysis and management at Cornell University.

Even the authors of the much-cited study mentioned above caution that there are a number of factors—such as different majors' earning potential, job and internship placement rates, and opportunities for research with professors—that should be considered along with a school's reputation.

"Our advice would be to gather as much of that kind of information as possible," Hilmer says.

One useful rule of thumb is that the amount that you take out in student loans should not exceed your first-year salary, says Mark Schneider, a vice president and institute fellow at the American Institutes for Research and a consultant on Money's college rankings.

Schneider also suggests you automatically cross schools off your list that have a graduation rate below 30%. "Every student believes they're going to beat the odds," he says. But the reality is, most don't.

Here, based on Money's analysis, are schools with have some of the lowest starting salaries, subpar graduation rates, and higher-than-average loans taken out by students:

SOURCES: PayScale.com, U.S. Department of Education

Still, the news isn't all bad for techies: Here's a list of 25 great non-elite colleges where STEM graduates soar.