How Your Degree May Determine Student Loan Payments

Your major affects not only how much you enjoy college and your career but also how much you'll earn and whether student loan debt will eat into those earnings.

Your choice of major affects not only how much you enjoy college and your career but also how much you earn afterward—and whether student loan debt will eat into those earnings. If you take out student loans without considering your degree’s earning potential, you might end up looking back on your borrowing decisions with remorse. Among respondents with bachelor’s degrees who said they had regrets about their college education, taking out student loans was the most common, according to PayScale.  But those with Engineering, Education, and Computer Science degrees were most likely to say they had no regrets at all. There are many reasons for that, but in some cases, the ability to spend hard-earned money on goals and experiences rather than student loan payments could be a contributing factor. Read on to see which degrees leave college graduates with high early degree earnings compared to their debt, plus those that lead to low earnings and costly debt loads—at least at first.

Degrees with high earnings-to-debt ratios

Analysts at Student Loan Hero, a student loan advice website, compared average loan disbursements for several majors with their associated jobs’ early career salaries. They found that choosing these majors led to the highest salaries compared to average debt:

Physical Sciences

The early career median wage for Physical Science majors was $46,000, according to the US Department of Education, and students received an average student loan disbursement of just $5,290 in 2017. That makes it the major least likely to lead to an overwhelming student loan burden just after college.

Computer Engineering

Graduates with Computer Engineering degrees earned more than Physical Science majors in their early careers, at $65,000 per year, but also had more debt. Overall, computer hardware engineers can expect to earn $114,600 per year, according to the Bureau of Labor Statistics (BLS). That’s the third-highest salary among all engineers.

Engineering

There are many types of engineers, but studying Engineering in general can lead to an initial salary of $60,000 and an average loan disbursement of $7,926. The BLS projects almost 113,300 new architecture and engineering jobs will be available between 2018–2028, with most of that growth happening within engineering occupations.

Chemical Engineering

Those who study Chemical Engineering have the highest loan disbursement among the top five degrees ($9,004), and the highest annual early career salary ($68,000). Chemical engineers can look forward to earning $98,340 as a median annual salary, according to the BLS.

Computer Science

Computer Science majors typically earn $62,000 per year early on. Employment for computer and information research scientists will grow 16% between 2018–2028, according to the BLS, which is more than three times as fast as the average for all occupations. In the PayScale survey, Computer Science majors were also the least likely to report that they regretted their area of study.

Related: Kiplinger's 10 Best College Majors for a Lucrative Career

Degrees with low earnings-to-debt ratios

The following degrees lead to low initial salaries but high debt loads. In some cases, though, mid-career salaries in these occupations could help make up for early debt payoff struggles.

Law

Lawyers had the highest average loan disbursement in 2017: $39,982. But their typical median pay eventually reaches $120,910 per year, according to the BLS. That puts them on par with the highest-earning engineers.

Pharmacy

Compared to lawyers, pharmacists have a similarly high average loan disbursement ($39,685). But their typical median salary reaches even higher: $126,120, according to the BLS.

International Relations and Affairs

Those who studied International Relations and Affairs borrowed an average of $13,791 in student loans in 2017. Humanities majors were the most likely to regret their course of study, according to PayScale. That could be due to the fact that salaries are not as likely to justify the amount borrowed (early career wages average $45,000).  

Architecture

Architects earn a median salary of $79,380, according to the BLS. That means those at the start of their careers (averaging a salary of $45,000) and after may feel the pinch of student loan debt. 

Nursing Administration

While nurse administrators have low earnings compared to their debt, nurses in general will see a lot of job growth. Jobs for nurse anesthetists, nurse midwives, and nurse practitioners, for instance, are predicted to grow 26% from 2018–2028, according to the BLS. Those interested in nursing should consider the specific aspect of nursing they’re interested in and identify whether their expected salary and job growth will offset any debt they take on.

Related: Top 10 Career Fields in America: What You Should Know

Other factors to consider

Your ability to pay off student loans is due to several factors beyond your major, including the cost of living in your home state. The type of loans you took out—federal or private—also make a difference. 

Federal student loans, for instance, come with multiple repayment options, including plans that give you a monthly bill tied to your income. That can make it easier to afford loans on an early career salary. Other debt you take on—including credit card debt, a mortgage, or a car loan—can also stretch your budget. Make sure you understand how you’ll balance your student loans with the monthly payment on any new credit you apply for.

5 strategies to pay off your loans

As you seek to pay off loans on any salary, keep these potential tactics in mind:

1. Refinance loans if you qualify

Student loan refinancing is a strong option for borrowers with solid incomes and good credit. If you qualify, a lender could pay off your previous loans and issue you a new one at a lower interest rate. If you have federal loans, you can also consider debt consolidation. While consolidating can help lower your monthly payments by increasing your loan term, it’s unlikely to save you money.

2. Make biweekly payments

If you make a student loan payment every other week, you’ll end up making one extra full payment per year. That can speed up your repayment timeline and reduce the amount of interest you’ll pay.

3. Prioritize your highest-interest loans

You’ll save the most money over time if you put any extra money for payoff toward the loans with the highest interest rates, which is known as the debt avalanche method of repayment. You could also pay off the smallest loans first (called the debt snowball method) if you think that will motivate you more.

4. Get help if you need it

If you’re having trouble paying off loans, look into income-driven repayment for federal loans, or ask your private lender about options for reducing your interest rates or monthly payment for a period of time.

5. Keep interest from ballooning

Your career path might require you to go to graduate school to move up. In that case, when your loans go into deferment, consider continuing to pay the interest so your balance doesn’t grow by the time you start repayment again.

Related: What You Need to Know About Taking on Student Loans

Your potential student loan payment shouldn’t be your only consideration in choosing a major. But by thinking strategically about how to pay for school, you’ll be able to spend less energy on strategizing student loan repayment and more energy on growing a career you love.

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