ST. LOUIS–College students have highly optimistic—and in some cases “delusional” views--of just how much money they will be making after they graduate, according to a new survey and analysis.
The analysis released by Real Estate Witch, a unit of Clever, shows the average starting salary for college graduates is $55,260, but current college students expect to make nearly $104,000 in their first job.
With graduation season approaching, the strength of the economy has likely inspired unrealistic salary expectations that will “leave students disappointed,” stated Real Estate Witch. The company probed 1,000 undergraduates pursuing a bachelor’s degree about their financial situation, college experience, and the job market and said it found undergraduate students across all majors and institutions overestimate their starting salaries by 88%.
“When faced with reality, however, nearly one in three undergrads (31%) think they won’t make enough money to live comfortably after graduation,” the company said.
The Specifics
Among the findings in its survey:
- 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 one-in-three 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 one-in-seven don’t think they’ll ever pay them off
- Fewer than half of students (49%) feel prepared for their postgraduate careers, with one-in-six 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.
The Long (Optimistic) View
Real Estate Witch further noted that 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, the survey found.
“Data shows salaries do tend to double by mid-career in many industries, but $200,270 is more than most students can hope to earn in reality: The average mid-career salary is only $132,497,” the company said, adding that students’ expectations greatly exceed the salaries experts say are needed to live comfortably in even the most expensive areas.
“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,” according to the report.
Most Unrealistic Salary Expectations
Real Estate Witch said 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%, the company said.
For the full findings, go here.
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