While remuneration on graduation is not the only driver for students to undertake an undergraduate degree, there is an expectation that a tertiary qualification will increase earning potential. However, some degrees appear to be better 'value for money' than others.
In Australia, domestic students eligible for a Commonwealth Supported Place pay higher contributions for some degrees than others. Undergraduate degrees are split into three main bands based on expected earnings on graduation and one 'national priority' band, which changes year to year depending on which subjects are deemed a priority.
Students may assume that the more expensive courses in the higher bands will lead to the highest paying graduate salaries. However, analysis of data from the Data from the Graduate Salaries Report and the Graduate Destinations Report gathered by Graduate Careers Australia revealing the median salaries students can expect from their first job in their field and data from career website Seek highlighting the average wage for the sector suggests this assumption may not always be the case, and students should consider undertaking a degree in the national priority band instead.
Law, Dentistry, Medicine, Accounting, Commerce, Administration, Economics and Veterinary Science are in the most expensive band, with a maximum student contribution of $9,080 a year. In the second band, Computing, Built Environment, Health, Engineering, Surveying and Agriculture, all attract a maximum student contribution of $7,756 a year.
In the third band, Humanities, Behavioural Science, Social Studies, Clinical Psychology, Foreign Languages, Visual and Performing Arts degrees cost a maximum of $5,442 annually. Finally, the National Priority band includes Mathematics, Statistics and Science, and these undergraduate degrees cost $4,355 a year.
Combining the two sets of data from Graduate Careers Australia and Seek can tell us where graduates can expect to earn more than the average wage for the industry and where they can expect to enter on a lower rate of pay.
In most cases, a graduate salary exceeds the industry average wage for a worker with less than one year of experience by 12%, confirming expectations that a degree is linked to higher earnings. However, pharmacy graduates can expect to earn 10% less than the industry average and psychology graduates 13% less. This can be explained by the further training required on graduation for these disciplines.
According to the Graduate Careers data, dentistry students can expect the highest levels of graduate pay, earning $75,000, 67% more than the median for workers with one less than one year of experience and 44% more than the median for all workers.
However, dentistry students also pay the highest band and have to study for four years, making the cost of their degree high at approximately $45,400. This means the cost of their degree as a percentage of their graduate pay is 61%. Dentists and Dental Practice Managers typically earn around $75,000 even at the peak of their careers, according to data from Seek.
In comparison, Earth Sciences graduates experience a 20% gap between their graduate pay and the median for a worker with less than one year of experience, with graduates earning on average $54,000. The median wage for the industry is $45,000.
Yet because Science is currently accorded National Priority status, an Earth Sciences degree costs just $13,065. This puts the cost of an Earth Sciences degree as a percentage of graduate pay at 24%, representing better value than a dentistry degree, at least in the first few years.
Mathematics also emerges as a clear value-for-money degree. New graduates can expect a starting salary of $52,000, higher than Accountancy graduates, yet due to its National Priority status, students pay around $13,065 for a three-year degree against $27,240 for an Accountancy degree. Therefore, students interested in finance careers should consider mathematics when selecting their course.
A degree from the Physical Sciences, which also has National Priority status, would cost around $13,065 over three years, but salaries for graduates average $50,000.
Veterinary Science emerged as one of the least attractive degrees in terms of pay-off versus cost, despite being placed in the top band. Veterinary graduates can expect a salary of $45,000, yet a five-year undergraduate degree can cost around $45,400 as it is in the top price band. Veterinary Science was the only degree where the cost exceeded the average graduate salary.
Some careers start with a low salary and progress to high salaries after experience in the field. However, graduates who become Veterinarians, Practice Managers or Veterinarian Surgeons can expect a salary of $76,000 at the peak of their career, after 10-20 years experience, according to data from Seek.
In comparison, environmental scientists, a role in which 80% of workers either have an undergraduate degree or postgraduate qualification, can expect to earn around $100,000 after 10-20 years of experience.
Graduate salary is not the only consideration when choosing a degree. However, students selecting their undergraduate degree preferences should certainly look beyond the subjects associated with high paying careers and consider Mathematics or Science, as these subjects will not only result in a lower overall debt but may result in a higher salary on graduation.