Good news on job prospects for MBA graduates

Amid today's dismal jobs report comes positive news about the job market for MBA graduates.

After two years of sharp declines in hiring, M.B.A. students are having more success landing jobs, and getting them earlier, than during the depths of the financial crisis....
While there remain some pockets of weakness in industries such as health care, hiring at many traditional career destinations for M.B.A. graduates, including finance and consulting, are nearing pre-recession levels. Hiring is up by double-digits at consulting firms such as Bain & Co. and Accenture PLC, compared with 2008 troughs. Similar gains are being seen at financial-services companies, including Goldman Sachs Group Inc. and Morgan Stanley.
Overall, 57% of full-time M.B.A. students in the U.S. had offers by mid-March, compared with 40% a year earlier, according to a Graduate Management Admission Council survey released last month of 905 companies and 127 business schools nationwide. And the improvement continues as the latest school year closes out.

Among the business schools reporting positive hiring results are Cornell, UVA and Michigan.

As more financial-services and consulting companies come back to campuses, competition for M.B.A. talent is also pushing salaries higher—though not quite in line with inflation. The average starting salary is expected to be to $91,433 this year, according to the GMAC survey.

This should be good news for all the parents paying for their children's MBA degrees.

College majors and job prospects

A COLLECTION OF ARTICLES ON THE MARKET VALUE OF VARIOUS COLLEGE MAJORS:

The College Majors That Do Best in the Job Market – NY Times, 5/19/11

The majors with the worst placement records were area studies (44.7 percent in degree-requiring jobs) and humanities (45.4 percent).

I had to look up the definition of "area studies", the college major that ranks lowest in terms of both percent of graduates in jobs that require college degrees and median salary earned by graduates.  I've heard parents say that they refuse to pay for their child to major in anything that includes the word "studies".  From the CollegeBoard:

Area studies majors study the histories, politics, economics, and cultures of various areas of the world. They usually focus on a specific area, but sometimes compare two or more areas.

What different college degrees are worth in two charts - Washington Post, 5/20/11

Are you going to college? Are you paying for someone to go to college? Then you might want to study this graph closely...

The implication is clear: If you’re going to college to get a job after college, you’re better off in a major that lends itself to an obvious job after college. Engineering, say, or teaching. A humanities or communications degree turns out to be a much tougher sell.

The “Careers” of College Graduates – Washington Monthly, 5/20/11

What Are You Going to Do With That? – Chronicle of Higher Education, 5/24/11

Earnings are analyzed for 171 majors.

"It does matter what you major in."
And the differences are striking: For workers whose highest degree is a bachelor's, median incomes ranged from $29,000 for counseling-psychology majors to $120,000 for petroleum-engineering majors. The data also revealed earnings differences within groups of similar majors. Within the category of business majors, for instance, business-economics majors had the highest median pay, $75,000....
Men outearn women in each group of majors, and nearly every individual major, in many cases significantly. For instance, men who majored in math earn a median of $75,000, while women earn a median of $54,000. Some of that can be explained by occupation, Mr. Carnevale said: Many of those women who major in math go on to be teachers. The only majors with which women earned more than men were visual and performing arts, physiology, and information sciences.

Median Earnings by Major and Subject Area – Chronicle of Higher Ed, 5/23/11 An interactive graph

The economic value of a bachelor’s degree varies by college major. New data from the U.S. Census Bureau show that median earnings run from $29,000 for counseling-psychology majors to $120,000 for petroleum-engineering majors. Even when majors are looked at by groups, such as business or health, there is variation in pay depending on the specific major.

College Students Deserve to Know What Degrees Will Pay – The Atlantic, 5/24/11

The typical lifetime earnings of engineering and computer science majors are 50 percent higher than those of humanities majors, according to an analysis by researchers at Georgetown University's Center on Education and the Workforce....

Most big, long-term investments -- a house, a security, a 401(k) plan -- come with more information than you can use. But a four-year degree, which is a $100,000 to $200,000 investment at many private and public schools, is a black hole of data.

It's becoming a black hole of cash, too. The price of a post-secondary education is rising even faster than health care costs. Four-year college student graduate with an average of $25,000 in loan debt ... and those are the success stories, since fewer than 60 percent of four-year college students graduate in six years, anyway.
Better data wouldn't cure education inflation, but it would be a good start. The government should require every college to post a standard fact sheet about its degrees, along the lines of Harvard University education economist Bridget Terry Long's paper. The fact sheet could include total cost of attendance (median and average), loan default rate by degree, six-year graduation rate, employment rate and median salary twelve months after graduation, and alumni satisfaction rate.

Art history graduate unable to find job moves back home

Days after I read it, my mind kept returning to this story about an art history major still unable to find a "decent" job three years after graduating from college.  2009 was a very tough year, especially if your major was art history.

Alone in the darkness, a sense of defeat courses through her body -- disappointment about her past and uncertainty about what lies ahead. This, she thinks to herself, is surely what failure feels like.

Six years ago, Malik fled this town for Syracuse University. Since graduating in 2009 with a bachelor's degree in art history, she has yet to find a decent job.

She hadn't planned on moving back home and, at the age of 23, never expected to return to her mother's house for an extended and open-ended period of time....

"At times, it really feels very personal, it really feels like I've failed," says Malik, standing in the kitchen of her mother's two-story stone house and recalling the eight weeks since she returned home....

After graduating from college, Malik moved to Boston. There, she worked as a nanny, sold books, and waited tables -- a series of dead-end jobs that didn't pay more than the minimum wage, didn't require a college degree, and weren't remotely related to what she wanted to do for the rest of her life.
Two months ago, she ran out of money and drove home from Boston to Lansdale, a middle-class suburb north of Philadelphia, her car brimming with the contents of post-college life: canned food, twinkle lights, potted plants. 

In the video accompanying the story, Sabrina sheds some light on how she arrived at her predicament:

"I imagined I would graduate with my degree, and how hard I worked and the contacts I had, I imagined I would end up in a museum or a gallery.  That has definitely been adjusted as it becomes clear that there are people who have masters above me who are looking for that same job and I have to adjust those expectations because of it."

Why this naivete?  Were art history majors finding good any jobs in their field before the 2009 recession hit?

She's hardly alone. Malik is part of a generation of 20-somethings that's experiencing what it's like to graduate from college, move back in with your parents, and then get stuck there. Though estimates vary, a recent study by Twentysomething Inc., a consulting firm specializing in marketing to young adults, predicted that of the 2 million graduates in the class of 2011, 85 percent will return home because they can't secure jobs that might give them more choices and more control over their lives....

According to the U.S. Bureau of Labor Statistics, the jobless rate for younger workers with a college degree has more than doubled since the recession began four years ago -- from 3.5 percent in April of 2007 to 6.4 percent in April of this year.

For college graduates under the age of 25, finding stable work is a particular challenge. According to Andrew Sum, an economist at Northeastern University, about half, or 3.2 million, are "underutilized"  -- meaning they're unemployed, working part-time, or working a job outside of the college labor market, such as bartending or waiting tables.

Sabrina's mother paid $100,000 from savings and $20,000 from a loan to to send her daughter to Syracuse University.  Today, it's the mother who is making the loan payments while Sabrina struggles to pay on her $2,000 credit card debt.

Parents exert a powerful shaping force on their children's decisions to go to college, as well as which college to attend. In addition, they are often caught up in the emotional rush that a college education entails, further complicating an issue that has already become a financial minefield for the middle class.

"All along, I was going to make it work," explains Marilyn. "If I had to take out loans, I was going to do that."

Once Sabrina and Omar were admitted into the colleges of their dreams, Marilyn saw it as her personal responsibility to make sure they could attend -- even when it meant taking out additional loans in order to finance it. And while Marilyn says she doesn't regret her investment, she assumed that a $120,000 degree would at least translate into a decent-paying job for her daughter.

"One thing that terrifies parents more than budget deficits or a weak economy is job security for their kids. They're afraid they won't be able to pass along their middle class status to the next generation," says Anthony P. Carnevale, who directs Georgetown University's Center on Education and the Workforce. "In raising a child in America, the fear of failing is just enormous. Sending your kid to college used to pretty much guarantee their future success. It no longer necessarily works that way."

From a recent post: 

The vast majority of parents expect that their children will pursue a college education. Among those with one or more children under age 18, 94% expect at least one of their children will go to college.

More parents help pay for MBAs

Economic uncertainty, younger students going to business school instead of finding employment and the spiraling cost of tuition all seem to be factors in this change.

From 2003 to 2007, the number of prospective students who said they expect their parents to help them pay for business school doubled, and was approaching 40 percent in 2010, according to a 2011 survey by the Graduate Management Admission Council....

"Any time there is economic uncertainty like there is now, there is a general reluctance to borrow," Chitty says. "Borrowing from Mom and Dad is going to seem a lot safer than borrowing from the government and taking on a loan which likely can't be discharged in bankruptcy and can follow you for the rest of your life."...

Driving the need for parental aid is an uptick in the business school pipeline of younger students, especially those in the 24-years-and-under age bracket, says Michelle Sparkman-Renz, GMAC's director of research communications....
U.S. students are less dependent on parental support than their European and Asian counterparts, but those under 24 still expect to finance about 20 percent of their degree with help from family. Students from ages 24 to 30 intend to have parents pay for about 10 percent of their tuition, GMAC says...

The spiraling cost of tuition is one of the reasons students may be relying more on parents to pay for business school, says Dan Thibeault, president and co-founder of Graduate Leverage, a student loan consolidation and debt management company in Waltham, Mass. Of the MBA students he works with, about 15 percent to 20 percent have $150,000 worth of debt when they graduate, he says.
"That was unheard-of five or six years ago. Maybe a student in a four-year dental program would borrow that much, but for a student to come out of a two-year MBA program with that much debt is almost shocking," he says. "It may lead a sympathetic parent to say, 'Wow, that is a suffocating amount of debt. I have to get involved.' " 

Source:  Bloomberg Businessweek

Fewer employers offer tuition reimbursement

College students hoping to receive graduate school tuition reimbursement from their future employers should take note of these trends.

More business students receive employer tuition assistance, but fewer employers offer the benefit and fewer still will pick up the whole tab.... 

Today's working MBA hopefuls are facing more rigorous selection criteria and tougher odds than the generation before them when it comes to getting an employer to pay their way through school. Research suggests employers have found new ways to make the most of their graduate tuition investments, and avoid being burned by fickle employees who accept the money and leave anyway.
A growing number of prospective students are without the benefit at all. In 2010, 56 percent of employers offered graduate school assistance, down from 69 percent in 2003, according to annual benefits data collected by the Society for Human Resource Management (SHRM). The group's data show an average steady decline in offerings of about 2 percent a year. For companies with 500 employees or more, 75 percent offered the benefit in 2010, down from 80 percent in 2007.
Meanwhile, use of such programs more than doubled between 1992 and 2007, according to a 2010 joint study by SHRM and the National Association of Independent Colleges and Universities (NAICU), with the biggest boost among employees seeking graduate degrees. Thirty-six percent of employees reporting tuition reimbursements in 2007 said they were pursuing a master's degree, vs. 21 percent in 1992. Business was the top area of study reported in the survey, which included management, accounting, finance, marketing, and business administration degrees....

One reason tuition reimbursement is on the decline is that employers no longer expect a return on their educational investment. Cappelli says few employers viewed tuition sponsorship as a program where they would see an actual return on their investment following a student's graduation. 

Source:  Bloomberg Businessweek

New York to end Regents test 'fishy' scoring

Responding to a suspicious spike in the number of students barely passing high school Regents exams, New York State education officials have ordered schools to end the longstanding but controversial practice of rescoring tests that fall just below the passing grade.

I previously posted about "something fishy" going on with New York Regents scores, and now the state has finally decided to end this questionable practice.

In recent years, statistics show, an unusually large number of students have obtained exactly the minimum score needed to pass the exams, which are required for graduation and are often graded by students’ own teachers.

For more than a decade, state regulations required schools to reread science and math Regents exams with scores within five points of the passing grade, which has shifted from 55 to 65 over those years. The purpose was to ensure that no student would fail to graduate because of a scoring mistake.

But in practice, schools began to reread barely failing exams in every subject, according to several investigations and anecdotal reports. And at times, the process shifted from a quality review to an all-out effort to find points to help students graduate. Five Regents exams — one each in science, math and English and two in social studies — are required for graduation.

State officials have acknowledged unusual scoring patterns, and earlier this month ruled that high schools could not rescore any “open-ended” questions, ones with written or essay answers, in which grading is more subjective. In a message to principals this week, the New York City Department of Education made it clear that rescoring multiple-choice questions was also prohibited.

The order is part of a wider effort by the city and the state to shore up the accuracy of the Regents and other standardized tests as they ask them to carry an ever-growing weight in a data-driven accountability system for schools. In the next several years, teachers will begin to be judged in part on how well students do on the Regents. They are already an important factor in other high-stakes decisions, including annual A-to-F city school report card grades, whether schools are closed for poor performance, and whether principals are praised or fired. 

Shouldn't the next thing be for New York to end the practice of teachers scoring their own tests, the ones that will be used to judge their performance?

ADDED:  Ms. Eyre writes:

I'm pretty sure that every single teacher who has ever scored a Regents exam has been asked to scrub at least once.

Source:  State Ends a Practice of Rescoring Regents Tests - NYT