Key takeaways
- The average starting salary for 2025 graduates is just over $68,000 per year, but it varies widely by major.
- Despite the awareness, companies are still plagued by a clear gender pay gap, with men making $11,550 more per year than women.
- Knowing your starting salary will not only help you understand what colleges you can afford but help you advocate for yourself when talking to potential employers.
College is often seen as a clear path to higher earnings and professional success. But what happens when your four-year degree doesn’t live up to your expectations? This seems to be the case for many Gen Zers heading into the job market.
College students expect to earn $84,855 one year after graduation, according to a survey by Real Estate Witch, a research and review site that focuses on the U.S. housing market. This is a far cry from the average starting salary of $68,680 projected for 2025 graduates, according to the National Association of Colleges and Employers (NACE).
Having a realistic college graduate salary expectation is key to negotiating a fair salary after graduation when navigating the job market. It’s also especially important to know what you are likely going to make if you are borrowing money for college.
College students salary predictions: Expectation vs. reality
Gen Z students expect to earn roughly $16,175 more than the median starting salary for 2025 graduates. Their midcareer earning expectations seem to be even more off from current averages. According to the 2023 Real Estate Witch survey, students anticipate earnings of $204,560 a decade after graduation — a difference of over $105,000 from the average midcareer salary of $98,647.
Salary expectations by major
Salary expectations among college students vary greatly by major. Business and psychology majors by far overestimate their salary more than their peers.
On average, business majors anticipate earnings of $98,113 one year after graduation, while the average starting salary sits at $50,200. Psychology majors, on the other hand, expect to earn $88,265, with an actual starting salary of $44,700. In both cases, salary estimates are just under twice the actual average.
Liberal arts and journalism students also tend to overestimate their salaries more than other majors. According to the survey, these majors overestimate their salaries by over $43,000 and over $35,000, respectively.
Salary expectations by gender
Salary expectations not only vary by major but also by gender. A study by NACE found that female graduating seniors expect to earn 16 percent less than their male counterparts — and they typically do earn less. Part of this is due to the growing responsibilities women have at home as they get older.
“I do know that the gender pay gap has narrowed in certain fields, but I would say that is for beginning salaries,” said Dr. Deborah Liverman, the executive director of career advising and professional development at MIT. “Whether it’s taking care of children or taking care of our elderly, the pay gap widens because [women] have more responsibilities.”
Another reason is that most high-paying fields, like engineering and computer science are male dominated. Bankrate research shows that 74 percent of graduates in the 20 highest-paying degree programs at the bachelor’s level are men. Female students, on the other hand, tend to work in fields with lower salaries, like social work and childhood education.
But beyond the field of study, systematic barriers like inequities in promotions and positions also contribute to the existing gender pay gap, according to NACE’s findings.
Salary expectations by race
Both Asian men and women have higher salary expectations than their peers, followed by white men and men. Out of all groups, Hispanic women have the lowest median salary at $43,880.
If we compare this information to the latest data from the U.S. Census Bureau on median annual household income, we see that Black households have the greatest disparity in income versus other groups. Black households made $32,560 less than white non-Hispanic households and over $56,000 less than their Asian counterparts.
| Race/ethnicity | Median household income in 2023 |
|---|---|
| Asian | $112,800 |
| Black | $56,490 |
| Hispanic | $65,540 |
| White | $89,050 |
| Source: U.S. Census Bureau |
Why having realistic salary expectations matters
Researching your major’s expected earning potential is important to avoid choices that could hinder your future. Having realistic college graduate salary expectations helps you make wise decisions about how much you can spend on college and how much you should take out if you’re expecting to use student loans.
If you plan wisely, you’ll be able to easily manage student loan repayments out of college while allowing you to pursue other goals, like homeownership, starting a family or saving for retirement. Likewise, knowing how much you should be earning is key to negotiating a fair salary for yourself.
This awareness will prepare you to have productive discussions with recruiters about how much you should get paid — regardless of race or gender — based on your education, field of study and what others with similar experiences are earning.
Tips for college students and recent grads to navigate the job market
Liverman recommends the following to avoid selling yourself short and secure a good job offer when it’s time to head into the workforce:
Research the offer
You can find important information regarding job compensation in your field and area by checking out sites, like PayScale and the U.S. Bureau of Labor Statistics.
“Any field you go into at any level, you should know what your expected pay should be,” Liverman says. “Will it be different by geographic areas? Absolutely. But you have to get into the practice of finding out this information and not just accepting a job offer because it’s the only opportunity you think you’ll get.”
Ask about specifics
To know more about the compensation and job benefits rights in your state, you can visit MIT’s pay equity resource page. This tool is free to use and is open to any students or graduates.
I encourage our students to know what the compensation being offered is. What does that include? What are the benefits? All of these are things that you should know. How is compensation looked at [with] the company you’re going to? Meaning, what do yearly raises look like? What do bonuses look like? How are they decided? Does it change when you go into another role?
— Dr. Deborah Liverman, MIT’s executive director of career advising and professional development
Negotiate like you’re advocating for a friend
While you may not get the starting salary current students are hoping for, knowing how you would advocate for a friend will help you know how to approach potential employers about your desired salary and get you closer to financial security.
“Act like you’re asking for your best friend – not for yourself, okay?” said Liverman. “Because we will stand up for other people, but we don’t stand up enough for ourselves.”
Bottom line
Current students may not have the most realistic college graduate salary expectations, expecting tens of thousands of dollars more than what their industry pays. It might help to research the current starting salary based on your industry and education level.
That way, you’ll know a realistic number to aim for when talking with potential employers when you graduate. You’ll also be able to make decisions about how much you can reasonably afford for college so that you can have financial stability even while paying back student loans.
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