Students who graduate from New Mexico’s four-year colleges and universities see an average return of more than 150 percent of tuition costs within five years, a new report says, ranking the state second in the nation when it comes to the economic benefits of an academic degree.
The report, released this week by Student Loan Hero, an Austin, Texas-based student loan management company, says New Mexicans with bachelor’s degrees earn an average of $43,257 per year after graduation, while residents with only a high school diploma earn about $26,000 annually.
With the average cost of a bachelor’s degree in the state at just under $35,000 — one of the most affordable rates in the nation, according to the report — a graduate could break even in just two years.
Wyoming ranked first in the study, with a five-year rate of return of nearly 203 percent; Arkansas ranked third, at 120 percent; Texas fourth at 114 percent; and Georgia fifth at about 105 percent.
The new report comes just four months after another study by Student Loan Hero found that tuition costs per credit hour in New Mexico for in-state students at public colleges and universities are lower than the costs in any other state, at about $113 per credit. It also comes amid a debate nationwide about whether a college degree is worth the increasing costs of higher education and escalating student loan debt.
“It is a good benchmark of determining how much will this college degree impact your earning potential and is that going to be worth what you are putting into college,” said Elyssa Kirkham, the lead researcher for the report, made public Wednesday.
Kirkham said researchers used salary data from the U.S. Census Bureau from 2015 to determine a college graduate’s annual earnings in each state and then compared that figure to the cost of a bachelor’s degree in the state.
The report did not take into account whether a student received financial aid, such as a federal grant or a public or private scholarship.
“So for students who access that fund or tuition aid, the investment would be even lower for them,” Kirkham said — and the return would be far higher.
Data by Student Loan Hero
In New Mexico, thousands of students have earned degrees at state schools with the help of the Legislative Lottery Scholarship fund, which for years covered 100 percent of an eligible student’s tuition. In the last couple of years, the scholarship rate has been reduced to 90 percent of tuition costs, the result of rising demand amid declining lottery ticket sales and an ongoing state fiscal crisis. In the coming school year, the popular lottery scholarship will cover just 60 percent of a student’s tuition.
Still, the study shows it may be well worth the extra out-of-pocket costs for a New Mexico college student on a lottery scholarship to finish a degree program.
Terry Babbitt, associate vice president of enrollment management for The University of New Mexico, said the report confirms what the university has found in its own monitoring of student costs versus employment gains.
“Our costs, student debt levels and percentage of students borrowing are very manageable and do not represent the concerns often described in the national higher education and student debt discussions,” Babbitt said.
“New Mexico is a top choice to pursue post-secondary education,” he added.
Waverly Mathis, who graduated from UNM in May, agrees. The day before she graduated, she got a job offer with JetBlue Airways that pays $40,000 a year — “a pretty good salary” for a new graduate, she said.
The Albuquerque native said that while students should consider many factors before choosing a college, “a report like this could also help a student make that decision if they are deciding between two schools in different states and one state ranks better for earnings outcomes.”
The report did not include earnings for New Mexico students who earn associate degrees or earn some college credits but do not complete a degree program. That averages out to about $29,881 per year, according to U.S. Census Bureau data.
The report also did not break down the types of degrees or the types of employment for graduates. Kirkham said it is likely that a computer science graduate would earn much more than the average $43,257 in New Mexico, while a student with a humanities degree may earn less.