Michigan college graduates make $33,400 more, but fewer students attending

• Federal data shows Michigan public university graduates earnings range from $49,757 to $85,800 five years after graduation
• Fewer students are choosing college, however, and experts say many are skeptical of the true value
• The sticker prices of public universities have risen over several years but many students do not pay that full amount 

LANSING — As fewer students choose to go to college amid rising tuition rates and record national debt, state data show Michigan college graduates still significantly out-earn their peers.

Experts say college remains a value-added proposition for Michigan students and their families. But enrollment declines show many families disagree and are increasingly choosing different paths. 

Michiganders with bachelor’s degrees earn a median wage of $63,100 five years after graduation, while those with high school diplomas earn a median wage of $29,700, according to state data. That’s a $33,400 gap.

At Michigan’s 15 public universities, students who received federal aid have median annual salaries of between $49,757 and $85,800 five years after graduating, depending on the school, according to a Bridge analysis of U.S. Department of Education College Scorecard data. 

Median federal student loan debt, meanwhile, ranges between $19,500 and $27,000 for public university students, suggesting higher earnings could potentially offset those debts within a handful of years. 

Related:

• Where are the Michigan men? College increasingly a female dominated pursuit
• Michigan’s $23B education deal: Free community college for all, pre-K for many
• FAFSA filings down at Michigan universities. Will enrollment follow?
• More students graduating in four years from Michigan public universities

Those findings come as legal challenges threaten to derail President Joe Biden’s student loan forgiveness plans and students weigh the hurdles of the federal aid process that the government botched this year. 

Students considered to be dependents of parents can take out a maximum of $31,000 in federal student loans over the course of their undergraduate program. That’s in addition to any private loans students or families may take out. 

Nationally, total student loan debt reached a record $1.7 trillion in the first quarter of 2024, according to the Federal Reserve. The vast majority of that debt is from federal loans, which are far more common than private ones.

Federal data can be helpful to students weighing whether to go to college, but earnings will vary by major and are influenced by how popular a given program is at a school, said Brad Hershbein, senior economist and deputy director of research at the W.E. Upjohn Institute for Employment Research.

Experts told Bridge Michigan that immediate earnings after college matter, but wages continue to increase over the course of a career and the gap in earnings between college graduates and those without degrees widens more.

“The whole purpose of a four-year-degree is to prepare you for a 40-year career,” said Lou Glazer, president of Michigan Future, Inc., a nonprofit focused on building the state’s “knowledge-driven” economy.

Still, even college advocates acknowledge skepticism among high school students and adults over the value of a degree.

Only 22% of Americans think the cost of getting a four-year college degree is worth it, even if someone has to take out loans, according to a recent Pew Research Center survey. 

Enrollment trends reflect that unease: Between 2012 and 2022, total undergraduate enrollment at Michigan public universities decreased by nearly 17%. 

Sticker shock

At Melvindale High School, about 42% of students who graduated last year attended college within six months.

Kelly Young-Raymore, a social studies teacher at the school, told Bridge that many high school students know college is expensive but “in an abstract way.”

Many students don’t realize that a listed sticker price is often not what students end up paying for college after federal and state aid, she said. At the same time, students are increasingly drawn toward entrepreneurship and careers they see on social media.

An eye toward entrepreneurship is something Deanna Morley sees at the private Southeast Michigan Construction Academy, which trains people for skilled trades careers that do not require a college degree. 

Morley, vice president of the academy, said the school has seen a “dramatic shift in our age demographic” in recent years. The average student is between 18-22 years old, meaning that many are coming directly from high school. 

For those who want to be their own boss or pursue entrepreneurship, Morley said the school teaches students they can advance into roles like superintendent, estimator, project manager or business owners with earnings that “are well within six figures.”

“But overall, there (are) lots of jobs opening now, we expect there to be more job openings well into the future, so that there is this ability to have 40-plus years of a career in construction,” Morley said. 

Skilled trades jobs, which often require a certificate instead of a college degree, can pay relatively well: Construction laborers make a median annual wage of $45,300 while electricians make $61,590 a year, according to the Bureau of Labor Statistics. 

Some young people are hesitant to take on debt, some don’t understand how the loan system works and others aren’t prepared for the rigor of college, Young-Raymore said.

Fear of college debt

From 2012 to 2022, in-state tuition has increased at all 15 of Michigan’s public universities. Hikes ranged from 22% at Michigan State, to 82% at Eastern Michigan. At the University of Michigan in Ann Arbor, tuition has increased by 29%.  

In that same time, a small handful of public universities had their median federal student loan debt decrease.

The largest decrease was at Ferris State University where median debt for graduates was $24,485.50 in 2012-2013. Ten years later, median debt is $21,000. In that same time period, tuition rose 26.3% and enrollment decreased 33.9%. 

Ryan Fewins-Bliss, executive director of the Michigan College Access Network, a group that works to get more students enrolled in college, said some high school students jump at the opportunity to make $20 an hour right after graduation. 

“What seems to be missing from that larger conversation is … lifetime earnings and the ability to … grow your earnings over time, whereas people without that rarely grow,” Fewins-Bliss said. 

Asha Shaw, early college and careers program coordinator at Redford Union High School, said she encourages high school students to enroll in colleges where they can maximize scholarships and grants and minimize the amount of debt they need to take out.

“I think that in this current climate, we are seeing less students go to college because of the fear of college debt,” she said.

The federal data does not paint a complete picture of student loan debt because it does not include private student loans. Nationwide, undergraduate and graduate students borrowed about $14.7 billion in non-federal student loans during 2022-2023, according to a College Board report. 

Shaw said she “never” advises her students to take private loans. 

Public loans offer borrowers some protections. During the pandemic, for instance, federal student loan borrowers were not required to make payments on their loans and their loans had a 0% interest rate. 

The Biden Administration had tried to issue student loan forgiveness for millions of borrowers but was stopped by the courts. In a separate effort, the Administration made changes to an income-driven repayment program that includes paths to loan forgiveness but that program faces hurdles through a series of court decisions. 

Both Shaw and Young-Raymore said they have not heard from students that they anticipate student loans will be forgiven. At the construction academy, Morley said the school does not accept federal aid and students pay about $4,000 a year to attend the school. 

Booting enrollment, removing barriers 

Shaw said she researches which schools are good at ensuring students come back between their first and second year. It’s not just enrollment for her, it’s also retention and ultimately, completion.

Patrick Cooney, vice president of Michigan Future, Inc., said students should look to see if a school’s graduation rates differ by race or socioeconomic status.

“Students who have to take out loans in order to complete their bachelor's degree, we think that’s a great investment because it’s going to pay over a lifetime of earnings,” Cooney said. 

Cooney said student loan default rates are low for those who complete a bachelor’s degree at a four-year university, as he noted in a 2018 analysis. “Passing on a four-year school may in fact be the far riskier option,” he wrote at the time. 

Currently, “students have to do a lot of digging” to find the net price of college – after grants and scholarships – for students with similar household incomes, Cooney told Bridge. He said that can scare students away from applying to schools in the first place.

Michigan leaders have taken steps to reduce costs to a college education. 

In 2022, lawmakers approved the Michigan Achievement Scholarship which provides funds to attend community colleges, independent nonprofit colleges and public universities. 

After the scholarship was approved, some schools announced tuition-free guarantees for qualified students. Last month, lawmakers voted to increase the amount some students receive.

“It's too early to determine if these new financial aid programs will reduce debt, but the logical reasoning says, ‘of course they will,’” Fewins-Bliss said. 

“Where students might get the new Community College guarantee, or Michigan Achievement, or Pell, we know that their pathway is cheaper and they are less likely to take out a bunch of loans because it's cheaper.”