2022 Data: College Students Overestimate Starting Salary by $50,000 (2023)

2022 Data: College Students Overestimate Starting Salary by $50,000 (1)

Salary Expectations | Salary Expectations by Major | Salary Expectations by Gender | Securing a Job | Job Market Predictions | Salary Satisfaction | Student Debt vs. Earnings | College Regrets | Pandemic Affects Career Planning

💰What is the average starting salary for college graduates? 💰

The average starting salary for college graduates is $55,260, but current college students expect to make nearly $104,000 in their first job.

In the coming weeks, millions of college students will step across the commencement stage and into the “real world” to begin their careers. Eager to leave the days of eating ramen behind, undergrads want to land lucrative jobs.

Soon-to-be graduates will enter a job market rapidly recovering from the COVID-19 pandemic. Job openings hover near record highs, and desperate employers are raising pay to entice top talent amid ongoing labor shortages.

Wages have risen 4.5% since December 2020 — the largest increase since 1983 — with starting salaries increasing 8% in the last five years alone.

Yet the strength of the economy has likely inspired unrealistic salary expectations that will leave students disappointed. To learn more about their salary expectations, we asked 1,000 undergraduates pursuing a bachelor’s degree about their financial situation, college experience, and the job market.

We learned that undergraduate students across all majors and institutions overestimate their starting salaries by 88%. When faced with reality, however, nearly 1 in 3 undergrads (31%) think they won’t make enough money to live comfortably after graduation.

🤑 College Student Salary Expectations Statistics

  • 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 1 in 3 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 1 in 7 don’t think they’ll ever pay them off.
  • Fewer than half of students (49%) feel prepared for their postgraduate careers, with 1 in 6 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.

College Students Overestimate Their Postgraduate Starting Salaries by $50,000

Compensation rates have soared as employers raise salaries to attract top talent amid a competitive labor market. However, 90% of college students have seriously overestimated what they’ll make at their first entry-level job.

The average starting salary for recent graduates is $55,260, but students expect to earn almost double that — $103,880 — one year out of college. That’s nearly $46,000 more than they expected to make just three years ago.

Graduates may be in for a rude awakening: More than half (58%) say the average starting salary of $55,260 isn’t as high as they expected, with nearly 1 in 5 (18%) saying it’s much lower than expected.

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.

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.

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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.

Journalism, Humanities Students Have the Most Unrealistic Salary Expectations

When choosing a course of study, most students follow the money. The No. 1 reason students attend college is to earn higher wages in their careers (33%), compared to 30% who say they want to study a subject they’re passionate about.

The key to earning a good salary is to choose the right degree program, according to 81% of students who think their major impacts how much money they’ll make in their first job.

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%.

Women Expect to Earn Less Than Men

Despite well-documented research on the gender pay gap, nearly 1 in 4 students (24%) believe gender has no impact on an employee’s starting salary.

Not surprisingly, men are 14% more likely to say gender does not impact starting salaries. Meanwhile, women — who earn 80 cents to every dollar a man makes — are 4% more likely to say it’s a legitimate problem.

Gender-based salary differences may result in lower salary expectations among women. On average, women anticipate earning $103,550 at graduation — 0.5% less than men.

The gap widens to 4.3% within 10 years of graduation, when women expect to make $195,000 — $8,740 less than men.

Many argue that the gender pay gap persists because women are overrepresented in lower-paying jobs. We found, however, that women often expect lower pay in the same professions, including those traditionally dominated by females.

For example, women outnumber men in the psychology field, but they anticipate about $12,000 less than men in annual salary.

Although women have increased their presence in higher-paying jobs, they’re still promoted to leadership roles at much lower rates, likely causing the growing rift in mid-career salary expectations between women and men.

Salary discrepancies are even greater among women and men of color, with Black respondents expecting mid-career salaries of 1.7% lower than white respondents.

85% of Students Graduating in 2022 Don’t Have Jobs Yet

Just 15% of students graduating in 2022 have accepted a job offer — most of those students possess in-demand degrees such as finance and education.

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Thanks to a hot job market, however, 44% of graduating students say the job search is progressing easier than expected. Students who don’t have jobs lined up are optimistic about their prospects and expect to find a job within three months or less after graduating.

Half of students (50%) are confident they’ll find a job related to their major.

Nearly 45% of Job Seekers Expect the Hiring Market to Improve

Students graduating in 2022 have a strong job market awaiting them, with employers planning to hire nearly 27% more graduates from the class of 2022 than they did from the class of 2021.

Hiring managers are scrambling to attract workers by offering higher pay that’s reinforced students’ sky-high expectations. But economists question how long the labor market can sustain its momentum.

About 44% of students who aren’t graduating in 2022 think that by the time they toss their caps, the job market will be even better than it is now. Once again, students’ expectations may be out of touch with reality.

Although the job market has rebounded from the coronavirus-induced recession — adding at least 400,000 jobs for 11 straight months — job growth in March 2022 increased at the lowest rate since September 2021.

Economists also warn that the Federal Reserve’s decision to raise interest rates to fight rampant inflation may slow the overall economy. As a result, hiring may decelerate to a more sustainable pace and normalize in the latter half of 2022.

Half of Students With Jobs Lined up Are Dissatisfied With Their Starting Salaries

Disappointment is inevitable when undergrads leave university with unrealistic salary expectations. Among students who have jobs lined up after graduation, only half (51%) are satisfied with their starting salaries.

When reality sinks in, about 1 in 3 students (31%) doubt they’ll make enough money to live comfortably after graduation. The most common fears include:

  • Inability to afford basic expenses (30%)
  • Inability to do “fun” things (29%)
  • Having to work a second job (29%)
  • Inability to pay off student loans (29%)
  • Taking on credit card debt (29%)

Approximately 1 in 8 students say they won’t compromise their salary expectations for any reason, especially when it may take years to make up lost earning power. Others fear burnout if they’ll need to work a second job to make ends meet.

Not everyone has the savings or family support to wait for a high-paying job when rent, bills, and student loans are due. Although a good salary is a top priority for soon-to-be graduates, students may be willing to accept a lower salary if the job comes with perks such as:

  • Great benefits (39%)
  • A desirable location (31%)
  • Remote work options (30%)

Fewer Than Half of Students Believe College Is Worth the Debt

Nearly 43 million Americans have federal student loans totaling $1.57 trillion, with the average undergraduate carrying about $30,000 in student debt. However, 43% of our respondents have more than that amount, including nearly 1 in 3 students (29%) who will graduate with $50,000 or more in debt.

The standard student loan repayment plan lasts 10 years, but it could take longer if students’ salaries are lower than expected. About two-thirds of students (63%) believe it will take 10 years or more to pay off their loans, while 1 in 7 (14%) don’t think they’ll ever pay off their student debt.

The rising costs of college can cause financial hardship for students as they try to build their lives.

More than half of undergraduates (55%) work a full- or part-time job to support themselves through school, but doing so takes up time they could otherwise spend in study groups, internships, or student organizations related to their future careers.

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Approximately 45% of students say they’ve lost opportunities to participate in internships, work-study programs, and student organizations because they have to work.

Even with income from a job, 3 in 5 undergrads (59%) have had to take on additional debt, including more student loans than expected (30%), credit card debt (28%), and personal loans (27%).

College is expensive, but most experts agree it’s still a smart investment because it leads to higher earning power. In 2020, individuals with a bachelor’s degree earned $34,000 more than those with just a high school diploma.

Yet nearly half of students disagree — 48% believe college isn’t worth the debt.

Return on investment is largely dependent on the degree students choose to pursue. In a study of 40,000 undergraduate programs, the think tank Third Way found that graduates in 25% of programs — primarily in fine arts — do not recoup their costs within 20 years of graduation. About 1 in 6 programs show no return on investment at all.

As wages rise, however, the gap between college costs and starting salaries is starting to close. From 2015–2020, college costs increased 7%, while starting salaries rose slightly higher at 9%. This gap may be even closer in 2022, as starting salaries continue to increase in the current job market.

40% of Students Regret Attending College

Lacking comprehensive information about employment opportunities, earning potential, and the long-term implications of student debt, many students feel remorse about attending college.

One of the most common regrets students have is accumulating too much student debt, especially for a degree that doesn’t translate into a well-paying job. As a result, fewer than half of students (48%) believe that college is worth the cost.

If they could do it over, 40% of students would choose a different major — perhaps one with stronger job prospects and higher starting salaries. Additionally, 41% would choose a different college with lower tuition costs, more career resources, or better academic programs.

Despite paying such a large sum for their education, fewer than half of students (49%) feel prepared with the knowledge and skills needed for their postgraduate careers. Approximately 1 in 6 say they feel very unprepared.

Students enter the workforce feeling less than optimistic. In fact, 81% feel some negative emotions about graduating and joining the workforce, with nearly 1 in 5 (19%) expressing only negative emotions.

1 in 3 Students Say the Pandemic Negatively Affected Their College Experience

Even before the COVID-19 pandemic, paying for college was a struggle. When the pandemic hit, many young college workers lost their jobs and a means of paying for their education.

Rather than pay thousands of dollars for scaled-back educational and social experiences, many students decided not to return to college. Undergraduate student enrollment has dropped 6.6% since 2019, leading to 1 million fewer students enrolled in U.S. colleges and universities than before the pandemic began.

Undergraduates who continued their education lost out on face-to-face instruction, hands-on labs, and in-person career services, which may have negatively impacted learning and opportunities for career growth.

Among students who stayed in school:

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  • 34% say the pandemic negatively impacted their job opportunities.
  • 34% say the pandemic negatively impacted their social skills.
  • 32% say the pandemic hindered their ability to get an internship.

Pertinent work experience is critical to landing a job in today’s hiring market. Not only do internships provide students with the technical skills needed to succeed in their industry, they also allow participants to hone their social skills and connect with co-workers who can provide valuable references.

Yet nearly half of students (48%) say they lost opportunities to participate in internships, work-study programs, and student organizations because of the pandemic.

In 2020, half of all internships were canceled. Competition was fierce the following year, as those who failed to secure an internship in 2020 competed with a new class of students for a limited number of positions. By spring of 2021, only 22% of college students had worked an internship, and only half worked in person.

Approximately 78% of students believe that failing to secure an internship will have some impact on their starting salaries.

Methodology

The proprietary data featured in this study comes from an online survey commissioned by Real Estate Witch. One thousand people who identified as college students pursuing a bachelor’s degree were surveyed March 23-26, 2022. Each respondent answered up to 21 questions related to their financial situation, college experience, and the job market.

About Real Estate Witch

You shouldn’t need a crystal ball or magical powers to understand real estate. Since 2016, Real Estate Witch has demystified real estate through in-depth guides, honest company reviews, and data-driven research. In 2020, Real Estate Witch was acquired by Clever Real Estate, a free agent-matching service that has helped consumers save more than $82 million on realtor fees. Real Estate Witch’s research has been featured in CNBC, Yahoo! Finance, Chicago Tribune, Black Enterprise, and more.

FAQs

What is the average starting salary for college graduates?

The average starting salary for recent college graduates is $55,260, but students expect to earn almost double — $103,880 — one year out of school. Learn more.

Which students have the most realistic salary expectations?

Computer science majors have the most realistic expectations, overestimating their median starting salary of $75,100 by only 27%. Learn more.

Which students have the most unrealistic salary expectations?

Students 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 annually — 139% more than the median journalist's starting salary. Learn more.

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FAQs

What is the highest starting salary out of college? ›

The average college graduate salary is $55,260 in 2022. Petroleum engineers have the highest starting salary $87,989. Technical majors have the highest starting salaries with an average of around $80,000. $85,000 was the most common starting salary expected by college students.

What is average graduate starting salary? ›

Graduate salaries in 2022

The current average graduate salary in the UK is just over £24,000*, according to the Graduate Outcomes report by HESA (Higher Education Statistics Agency). However, we've heard folk reporting everything between £16,000 and £90,000.

What is the average salary in the US? ›

According to the latest data from the U.S. Bureau of Labor Statistics (BLS), the annual mean wage for a full-time wage or salary worker in the United States is $53,490 per year or $1,028 per week (for a 40-hour work week).

Is 60000 a good salary straight out of college? ›

Yes, a $60,000 salary is a great salary for most new graduates. The average salary for new college grads is $55,260, with many jobs paying as low as $40,000 for entry-level positions. With that in mind, a $60,000 salary is a great start for most college grads.

What is a good salary in 2022? ›

A good monthly income in California is $3,886, based on what the Bureau of Economic Analysis estimates that Californians pay for their cost of living. A good monthly income for you will depend on what your expenses are and how much you typically spend per month.

What is a good salary after university? ›

Key graduate salary statistics 2022

London graduates earn the most across all UK regions with an average salary of £28,634, whilst grads in Wales earn the least at £22,420.

Does having a degree increase your salary? ›

College-educated workers enjoy a substantial earnings premium. On an annual basis, median earnings for bachelor's degree holders are $36,000 or 84 percent higher than those whose highest degree is a high school diploma. The earnings gap between college graduates and those with less education continues to widen.

Can you negotiate graduate salary? ›

Usually, salaries for entry-level and graduate jobs are fixed and there is less room for negotiation than for a more senior role where candidates may have varying levels of experience and expertise to offer the employer. It is normal for everyone starting the same graduate scheme to be paid the same.

Is 50k enough to live in USA? ›

In general, a salary of $50,000 a year is enough to live comfortably in America. Of course, this varies depending on location. For example, someone earning $50,000 a year in New York City would likely have a much different standard of living than someone making the same salary in rural Arkansas.

What is a comfortable US salary? ›

In a 2021 modern wealth survey, Americans told Charles Schwab that they need an average net worth of $934,000 to be financially comfortable.

Is 60k a year middle class? ›

"To be middle class, a household of three would have an income between $40,000 and $154,000." A three-person middle-income household makes about $52,000 to $156,000 every year according to Pew's definition. A household of four would have to makes $60,000 to $180,000.

What is 60k a year hourly? ›

An annual salary of $60,000 breaks down to an hourly wage of $28.75, based on the federal government's work year of 2,087 hours. Your hourly wage depends on the number of hours you worked to earn your $60,000 — part-time workers or employees who take paid vacation will earn a higher hourly wage.

Is $60000 middle class? ›

A three-person household must have earned $51,962 to $155,902 to be considered middle-class while a family of four must earn about $60,000 to $180,000.

What is a middle class salary in 2022? ›

As of 2022, Pew identified a middle-income household as anywhere between $30,000 (for a single adult) to $67,000 (for a household of five). And depending on where you live, the same middle class income may mean living in relative comfort or enduring a tight squeeze.

What is a living salary in the US 2022? ›

An analysis of the living wage (as calculated in December 2021 and reflecting a compensation being offered to an individual in 2022), compiling geographically specific expenditure data for food, childcare, health care, housing, transportation, and other necessities, finds that: The living wage in the United States is ...

What salary is middle class? ›

The Pew Research Center defines the middle class as households that earn between two-thirds and double the median U.S. household income, which was $65,000 in 2021, according to the U.S. Census Bureau. 21 Using Pew's yardstick, middle income is made up of people who make between $43,350 and $130,000.

What is the average salary in the US with college degree? ›

The average college graduate starting salary is around $55,260. Computer science majors have the highest projected average salary for 2022, making an average of $75,900. Engineering majors have the second-highest projected salary for 2022, with an average of $73,922.

What does the average person earn in a lifetime? ›

How much money people make depends on a few different factors—and could change drastically from industry to industry. But a new report from Zippia, a career information site, found that the average person earns nearly $2.7 million over their lifetime.

What is the #1 rule of salary negotiation? ›

Rule #1 of salary negotiation is this: Do not disclose your salary history or salary requirements. This can be uncomfortable, but it's your first opportunity to negotiate a much higher salary.

How high is too high when negotiating salary? ›

Do your skills exceed what's required of you? Start with a figure that's no more than 10-20% above their initial offer. Remember, you're applying for entry level, and you shouldn't expect something on the higher range. Consider negotiating lower if 10-20% places you above the average.

What is a low stress job that pays well? ›

Actuary, audiologist, and dental hygienist are some of the best low stress jobs that pay well.

Can I live comfortably making 50K a year? ›

Earning $50,000 a year should be plenty to live on in America. The nation's median income is just over $60,000, meaning that $50,000 per annum is the sort of salary that should clearly secure the basics, at the least. However, depending on where you live, that's not always true.

What is 50K a year hourly? ›

If you make $50,000 per year, your hourly salary would be $24.04. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week.

Is it hard to live on 50K a year? ›

If you're single, $50,000 is a pretty healthy salary in some parts of the country. On the other hand, if you're the sole breadwinner in a family of five, you may have a hard time on $50,000 annually. Either way, if $50,000 is where your salary stands, it pays to make the most of it.

How much is 20 dollars an hour annually? ›

If you make $20 per hour, your Yearly salary would be $41,600. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week. How much tax do I pay if I make $20 per hour?

What is a good salary for a 40 year old? ›

The median salary of 35- to 44-year-olds is $1,127 per week or $58,604 per year. That said, the number conceals considerable variation by gender. For example, male 35- to 44-year-olds earn a median salary of $1,232 per week, whereas women in the same age bracket earn a median of $1,003 per week.

What is a good salary to survive? ›

The median annual living wage — defined as the minimum amount you need to cover expenses while saving for retirement — is $61,617 per household in the U.S., according to calculations by personal finance website GOBankingRates.

How much does the average American woman make? ›

Men earned a median salary of $50,391 in 2021 while women earned $36,726, or 73% of men's salaries. The gender wage gap exists throughout the economy. The gender pay gap is most significant among self-employed workers.

What kind of job can you get making $100000 per year out of college? ›

For example, according to the Occupational Employment and Wage Statistics (OEWS) program, physicians, surgeons, chief executives, lawyers, pharmacists, and dentists in the U.S. all earn more than $100,000 per year, on average. So do some types of engineers and scientists, including astronomers and physicists.

What salary is good out of college? ›

A good starting salary out of college is between $50,000 and $60,000. This lines up with the current average of $55,260, which is over $10,000 more than the median starting salary for high school graduates ($41,251).

Can you make 6 figures without a degree? ›

In fact, in some cases, a six-figure salary is readily accessible without a college degree. Before you invest in a costly degree, learn everything you can about the opportunities in your chosen field.

How much is 50000 a year per hour? ›

If you make $50,000 per year, your hourly salary would be $24.04. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week.

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