Elevated unemployment and career instability have driven increasing numbers of people to seek further education. Yet how do we measure the value of a good education? Is it in the skills acquired through coursework, post-graduation employment prospects or the potential for future earnings? Here we look at the reasons why more people are returning to the classroom, as well as the top schools for getting hired in an uncertain job market and the return on investment a student can expect.

With the United States unemployment rate lingering at 9.6 percent and many companies continuing to cut costs through layoffs or salary limits, more Americans are opting to return to school. Furthering one’s education can lead to better job prospects or earning potential, while also sharpening one’s workplace skills. But when is going back to the classroom the best professional option, and what are the real rewards of additional schooling?

“When the job market dips and people sense there’s going to be trouble, they look to go back to school,” Sam Silverstein, manager of media and public affairs for the Graduate Management Admissions Council, a nonprofit organization that runs the Graduate Management Admission Test (GMAT), told Portfolio.com. “Time and again when we go through a period of recession — when you see sharp drops in employment — you also see considerable rises in GMAT test-taking activity, and this goes back 40 years.”

Those with a higher level of education are statistically likelier to earn more in the long run. According to a quarterly report on salaries from the U.S. Department of Labor, released in July, full-time workers aged 25 and over with a high school diploma earned a median of $629 per week, compared to $1,138 for those holding at least a bachelor’s degree. Among those with advanced degrees (master’s and above), the highest earning male workers took in $3,297 or more per week, while their female counterparts brought in $2,178 per week.

However, there are also numerous costs, as well as a major time commitment, required to obtain further education. As such, adults interested in pursuing another degree or certification should weigh several factors before deciding to return to school.

Forbes.com says it’s important to ask yourself, “How are you going to pay for school? If you attend part-time while working, how will you manage the class load and study time on top of your current job? What are the compensation prospects once you have that degree? Will you necessarily do better than you do now?”

Where Employers Look First
If the benefits of further education outweigh the challenges, the next step is to choose a school or program that will improve your future professional prospects. Since the economic downturn, however, the educational landscape has changed dramatically, with employers increasing their focus on graduates from larger public universities.

“State universities have become the favorite of companies recruiting new hires because their big student populations and focus on teaching practical skills gives the companies more bang for their recruiting buck,” the Wall Street Journal reports. “Under pressure to cut costs and streamline their hiring efforts, recruiting managers find it’s more efficient to focus on fewer large schools and forge deeper relationships with them.”

According to a survey this month from the Journal, recruiters from major companies across 30 industries ranked big state schools over elite liberal arts schools, including the Ivies, in providing the best-qualified graduates overall and by major. This preference is due to the larger pool of potential employees available at state schools, their proximity to certain businesses and the ease of establishing partnerships with the universities, which allow companies to take an early look at promising students.

Pennsylvania State University was ranked at the top of schools most popular with recruiters, followed by Texas A&M University, University of Illinois at Urbana-Champaign, Purdue University and Arizona State University. (Full list HERE)

“Recruiters also like to hire candidates who will keep their own company’s costs down, and state schools tend to be filled with students who live nearby (so the company saves on relocation costs), and who, unlike Ivy Leaguers who might want to job hop every year or go back for advanced degrees, will be more likely to stick with the job for the long haul (so the company saves money on having to hire new people all the time),” according to Time Magazine’s It’s Your Money blog.

What Graduates Can Expect From Their Investment
Apart from job prospects, the expected earnings from a degree are usually an important consideration for returning students. Selecting and being accepted into the right school is only the first step, as deciding on a major or specific field to pursue is equally crucial for your professional future. Fortunately, those interested in pursuing an education in industry-related fields, particularly engineering, are in a good position for high potential earnings.

According to a recent survey from compensation research firm PayScale, this year the best college majors by salary are represented in the graph below:

PayScale Methodology: Annual pay for bachelor’s graduates without higher degrees.
Typical starting graduates have 2 years’ of experience; mid-career have 15 years.

In terms of return on investment (ROI) for education, the benefits vary significantly between schools and degrees. According to a separate report from PayScale on college ROI, technical schools such as the Massachusetts Institute of Technology (MIT) and the California Institute of Technology (CalTech) provide the highest returns, with an annual ROI of 12.6 percent each. Harvard University and Harvey Mudd College both offer 12.5 percent annual ROI, while Dartmouth offers 12.4 percent.

Despite the differences, the average return on investment for education remains “competitive with other investments over the last 30 years at most schools,” PayScale explained in an announcement of the findings. “At all schools, expected annual return for investment in education is competitive with current 30-year Treasury bonds (yielding approximately 4.5 percent). And while the S&P 500 has returned about 13 percent annually over the last 30 years, besting all but 88 of 554 schools (16 percent), 449 (81 percent) of schools can equal or better the more recent 20-year return of 8.1 percent.

“At many schools,” PayScale continues, “investing in college costs, even at full price, has been competitive versus getting a job out of high school and putting the money in the market or treasury bonds.”

Related

Compensation Rates in Today’s Economy

The Country’s Best Engineering Schools

Top Schools and Scholarships for Industry Sciences

Resources

Back to School
by Janet Kornblum
Portfolio.com, Aug. 9, 2010

Usual Weekly Earnings of Wage and Salary Workers Second Quarter 2010
U.S. Department of Labor, July 20, 2010

Should You Go Back to School?
by Susan Adams
Forbes.com, Nov. 4, 2009

Penn State Tops Recruiter Rankings
by Teri Evans
The Wall Street Journal, Sept. 13, 2010

Top 25 Recruiter Picks
The Wall Street Journal, Sept. 13, 2010

The Colleges Corporate Recruiters Really Love
by Brad Tuttle
It’s Your Money (Time Magazine), Sept. 13, 2010

Best Undergrad College Degrees by Salary
PayScale, 2010

Which Colleges Are Worth Your Investment?
PayScale, June 28, 2010

…Which Colleges and Universities Are Worth the Time, Energy and Money
PayScale, June 28, 2010