Unrealistic Undergraduate Salary Expectations vs Reality

– Unrealistic Undergraduate Salary Expectations –

Unrealistic Undergraduate Salary Expectations: College students have serious unrealistic expectations for their starting and mid-career salaries, according to a recent survey by Clever. Young adults are actually, exposing themselves to disappointments.

Amongst the ever-increasing cost of college and the student loan debt they may be met with once they graduate, college students may find that they are making less money than they expected when they enter the workforce.

“Generation Z” undergraduates that were surveyed said they expect to make $57,964 one year out of college, but the national median salary is presently $47,000 for graduates that have a bachelor’s degree and less than five years of job experience.

Illusive Expectations

The average Gen Z college student pursuing their bachelor’s degree expects $57,964 just a year out of college. The national median salary, on the other hand, is nearly $11,000 lower at $47,000 for recent graduates with zero to five years of work experience.

Mid-career (Mis) estimates

According to a survey, the average undergraduate also overestimates how much they’ll be making by mid-career (10 years out of college) by about $15,000.

The survey also discovered that women expected lower salaries than men with the same degree and major.

In all, college students with a four-year or graduate degree will earn about 23 percent less than they expected to in their first year out of college, according to Clever.

Expectation vs. reality

Reduced spending

It is probably a good thing, then, that a recent University of Michigan study found young adults spending less compared to previous generations, Clever stated.

“Younger consumers see the buying conditions for big-ticket items like homes and cars less favorably than older generations, leading to less spending overall,” the report states.

“The study points to weakened job prospects, delayed marriage, and student debt as the major  causes, but we also need to consider that college graduates are discouraged by their middling salaries upon their entry to the real workforce.”

Key Findings

• Students tend to overestimate how much they will make right out of college. The average undergraduate expects to make $57,964 one year into their career, while the national median salary is $47,000 for bachelor’s degree holders with zero to five years of experience. This holds true across most majors.
• The average undergraduate also overestimates how much they will be making by mid-career (10 years out of college) by about $15,000 monthly.
• Young adults are not spending as much as previous generations, and unrealistic salary expectations are contributing to reduced spending once students graduate.
• Women expect lower salaries than men, even when they are in the same major. On average, women holding a bachelor’s or graduate degree expect $4,338 less than their men counterparts with similar degrees early on in their career, and $10,836 less than men by mid-career.
• Generation Z gives different employee benefits than millennials. They rank tangible, money-based benefits– like competitive salaries and excellent insurance plans – above a fun work environment, flex time, and unlimited PTO. Going to college to earn more money throughout their career is the number one reason Gen Zers are getting a degree.
• College students are really less optimistic about the value of their education than the alumni. According to a Gallup poll, 50% of graduates strongly agree that their education is worth the cost and only 36% of current undergraduates strongly believe their college education is worth the cost.

Key Insights & Analysis

The average undergraduate overestimates how much they will make after college by more than $10,000.

Using PayScale’s College Salary Report^[1], we cross-referenced undergraduate pay expectations with median early-career salaries across the 11 most popular majors. With almost all degrees, undergraduates expressed expectations for their early-career salaries that were well above the national median.

On average, students who graduate with a four-year or graduate degree will earn about 23% less than what they expect to right out of college.

Analysts found that the median expected salary after graduation was $60,000, which is also consistent with the $57,964 average our respondents expected. The students surveyed were pursuing careers in various fields, but they often overestimated the value of their degrees right out of college.

Average Salary for College Graduates

Salaries Based on Jobs

Based on the jobs analyzed by Korn Ferry, the top salaries on the list pay in the mid-60s:

Salary Based on Location