Software Engineer Salary: How to Decide If the Student Debt is Worth It

Software program engineers use the ideas of engineering and apply them to laptop software program. With the expansion of technological careers, it’s an ideal career to pursue at a projected 22% development fee from 2019 to 2029, based on the Bureau of Labor Statistics (BLS).

For the aim of profession evaluation, the BLS doesn’t distinguish between builders and engineers, so when it makes use of the time period “software program developer,” that’s what we’ll have a look at. A software program engineer would possibly work on varied elements of the software program creation course of, together with design, upkeep and testing.

Most employees want a bachelor’s diploma in laptop science, software program engineering, or a associated area to qualify for a software program engineer position. After solely 4 years of faculty, you’ll have a manageable quantity of scholar mortgage debt in comparison with your common software program engineer wage. You may additionally discover job listings that enable candidates and not using a diploma, however you’ll want expertise or coaching to qualify.

Though you may want or want a complicated schooling afterward, you may possible do this after you’ve gained some expertise within the area and uncover which particular coaching advantages you most.

Common scholar mortgage debt amongst software program engineers

When you’re pursuing a profession as a software program engineer, the excellent news is {that a} bachelor’s diploma is ample to get began in a full-time profession. Some folks may also have the chance to begin with an affiliate’s diploma, and work at an entry-level expertise place whereas ending their four-year diploma.

The common scholar mortgage debt of the 2021 graduating class is projected at $36,140. In fact, some folks graduate with roughly debt, however this estimate might help you propose.

Though software program engineers’ common scholar debt is important, paying it off fully on the typical software program engineer wage is feasible. The debt-to-income ratio for software program engineers is comparatively low, primarily based on the price of incomes a bachelor’s diploma in comparison with the career’s sturdy beginning earnings and potential development.

How a lot software program engineers make

As a software program engineer, you may fairly anticipate to make a wholesome earnings to repay scholar loans from a four-year diploma.

The common beginning software program engineer wage ranges between $67,751 and $76,444, based on ZipRecruiter and Payscale information. After just one to 4 years of expertise, the typical software program engineer wage jumps to $84,044 primarily based on Payscale figures.

There’s loads of wage development as you achieve expertise throughout the area. The median yearly wage for a software program developer, based on the newest BLS information, was $107,510.

Nonetheless, loads of tech corporations like Google and Fb are identified for aggressive compensation packages together with inventory choices, even for these simply beginning out within the area. With inventory choices and bonuses, your whole annual compensation may be tens of hundreds of {dollars} greater than your base wage.

The sphere of software program engineering brings quite a lot of variance when it comes to base wage, bonuses, pay raises, and different compensation elements, so ask loads of questions earlier than accepting a job supply.


Bear in mind taxes will decrease your software program engineer wage. Let’s think about Liz is starting her profession with a software program engineer wage of $80,00.

If she’s single, her tax fee in 2021 can be 10% on the primary $9,875; 12% on the subsequent portion; and 22% on the rest. The full in federal taxes can be $10,588, leaving her with slightly below $70,000 for different bills.


When calculating the overall price of your schooling, don’t ignore curiosity expenses. Curiosity charges improve your whole instructional price, particularly in case your loans are unsubsidized.

Typically, federal Direct Sponsored Loans are advantageous as a result of the Division of Training pays your curiosity whilst you’re enrolled at school a minimum of half-time. It additionally covers curiosity expenses that accrue throughout your grace interval, and in deferment.

Direct Unsubsidized Loans accrue curiosity as quickly because the mortgage is disbursed and that curiosity is frequently added to your steadiness. With non-public loans, the curiosity can be usually not backed, which leaves your accountable for that price.

Delayed investments

Software program engineers earn strong salaries instantly out of faculty. Nonetheless, when you’re on the low finish of the wage spectrum, you might need a tough time doing rather more than paying your scholar loans and on a regular basis life bills.

Plus, when you’ve paid a premium on your bachelor’s diploma, your scholar mortgage steadiness might be a lot greater than the typical of $36,000. A low earnings and excessive debt implies that money circulation might be a difficulty, forcing you to delay monetary milestones, like shopping for a house or investing in retirement.

Scholar mortgage compensation choices for software program engineers

We’ll return to our software program engineer Liz incomes $80,000 a 12 months and assume the typical of $36,000 in scholar debt at 7% curiosity when she graduates. Utilizing the Scholar Mortgage Planner® refinancing calculator, you’ll see that personal mortgage refinancing is her best choice for compensation.

Refinancing the mortgage right into a 10-year with a 3.5% rate of interest means Liz would pay a complete of $42,719 on her $36,000 mortgage. The Revised Pay-As-You-Earn (REPAYE) compensation plan is the subsequent best option, although its month-to-month funds are greater.

Finest software program engineer compensation choices when PSLF is unavailable

Assuming Liz works for an organization and never a nonprofit, the PSLF program choice gained’t be obtainable. This leaves non-public refinancing as her apparent selection once more.

See our full information to refinancing scholar loans.  

Greater scholar mortgage balances would possibly change the dialogue

Now, what in case your scholar mortgage whole is above-average? Attending an out-of-state establishment or a non-public college will increase your instructional prices, so your loans may be rather more than the nationwide common.

If Liz had the identical $80,000 wage however $65,000 in scholar loans, that adjustments the equation. On this case, PSLF is her finest guess if she labored with an eligible employer. She’d pay $59,124 below the PSLF program, after which the remaining steadiness can be forgiven.

The following neatest thing if PSLF is unavailable is refinancing to a decrease rate of interest. If she may drop her rate of interest from 7% to three.5%, she’d pay a complete of $77,131 to be rid of scholar mortgage debt for good.

Sadly, if money circulation is a matter and PSLF isn’t an choice (for instance, if she labored within the non-public sector), Liz would want to go for PAYE or REPAYE. These two compensation plans would assist Liz handle month-to-month funds higher, although it ends in a a lot greater general scholar debt price.

Is a software program engineer wage well worth the debt?

When deciding the worth of a software program engineer wage, take into account the price of a bachelor’s diploma at your chosen college, the realm you propose on working in and your employer.

Price of diploma to turn into a software program engineer

The price of a bachelor’s diploma to turn into a software program engineer varies relying on the place you attend. Right here’s a median annual price of tuition just for the 2020-2021 college 12 months:

  • 4-year public in-state college: $9,687
  • 4-year public out-of-state college: $21,184
  • 4-year non-public establishment: $35,087

Employment location

The place you select to work impacts your potential earnings, too. In accordance with BLS information, the 5 states with the very best software program engineer salaries are:

  • Washington: $131,790
  • California: $127,950
  • New York: $116,830
  • Virginia: $113,690
  • District of Columbia: $112,510

In expertise careers, distant work preparations are pretty widespread, so that you might need location flexibility as a software program engineer. It’s potential to reside in a low cost-of-living area however work for a tech firm incomes a excessive earnings to repay loans, rapidly.

Kind of employer

There may be totally different salaries provided relying in your employer. For instance, salaries at a big expertise firm could also be very totally different from these at small startups or when you’re working as an unbiased contractor.

Main expertise corporations like Google and Fb, for instance, pay aggressive wages at a median software program engineer wage of $138,500 and $154,720, respectively. Startups may also supply aggressive salaries for software program engineers, however they may not have the assets to supply advantages, like inventory choices or giant annual bonuses.

When you favor work flexibility, freelancing as a software program engineer is an choice. Freelance software program engineers nationally earn a median of $119,260 a 12 months, a ZipRecruiter report however rely on many components. As an unbiased contractor, you’ll lose out on worker advantages, like medical health insurance and 401(ok) matching. To assist make up the distinction, you may cost a better hourly fee.

Software program engineers want a plan for scholar mortgage compensation

The excellent news is that the typical software program engineer wage is sufficient to repay scholar loans you would possibly incur. In case your debt-to-income ratio is small (you earn a excessive wage in comparison with your debt), you’ll be out of debt pretty rapidly.

When you’re searching for steering in your scholar mortgage compensation, Scholar Mortgage Planner® consultants have a wealth of data and expertise from consulting on over $1.28 billion in scholar mortgage debt. Schedule a session to find the most effective path on your scholar mortgage repayme


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