Average Accountant Salary: Is It Worth the Student Debt?

Accountants play an essential role in keeping the finances of businesses and individuals running smoothly. The organization, analysis and maintenance of financial records are key tasks. As an accountant, you might also help corporations comply with legal financial requirements and manage funds effectively.

The field of accounting is expected to grow at an average rate compared to other careers, with 4% growth projected from 2022 to 2032, according to the latest Bureau of Labor Statistics (BLS) data. Accountants and auditors make a median yearly salary of $78,000 as of June 2023.

Accountant education requirements and average student debt

Accountants need a bachelor’s degree, which often means taking on student loan debt. The median student loan debt for a bachelor’s degree for 2022 graduates was $24,090.

There are ways to mitigate the cost of getting your bachelor’s degree, like choosing an inexpensive college, for example.

The median undergraduate student debt is well below the $78,000 median annual salary for an accountant. Many accountants can pay off their full student loan balance in a short time.

If you want to open up more opportunities, you may wish to pursue your credential as a Certified Public Accountant (CPA). State boards of accountancy impact the rules and guidelines for becoming a CPA, but here’s a general idea of what’s involved:

• Education. CPAs must have at least a bachelor’s degree and at least 150 credit hours.
• Examination. A passing score on the Uniform CPA Exam is required.
• Experience. At least one year of experience while under the supervision of a licensed CPA.

The Minnesota Society of Certified Public Accountants says that someone who takes a self-guided review course might expect to spend about $1,500 total to obtain the certification. That amount may not include review courses, registration fees for the exam and other fees. Plus, you’ll spend more to reach 150 semester hours to qualify.

How much do accountants make?

Is the average accountant salary is worth the amount of student debt required to qualify for an accountant position? Although some careers come at extremely high educational costs relative to the potential resulting salary, accounting is fairly reasonable.

Although the median salary for accountants is $78,000, this means half of accountants earn less than this figure. The BLS noted that the top 10% of accountants earned over $132,690 per year, while the bottom 10% earned under $48,560. 

As with many jobs, accounting tends to pay better as you gain more experience.

Accounting as a career pays fairly well, but if you graduated with higher-than-average student loan debt, paying off student loans will be tougher. Ideally, you’d be at the low end of the student loan range and the high end of the accountant salary range.

CPAs may be able to command higher salaries, but getting your CPA licensure means additional costs.

Taxes

As an accountant you’re aware that your gross salary is reduced by income tax. For example, a single person filing taxes in 2020 starting out with a $60,000 annual salary would pay about $6,268 in taxes to the federal government.

Interest

The interest on your student loan balance makes a huge difference in your payment total. The more quickly you can pay off your student loans, the less interest you’ll pay over the loan term.

Delayed investments

Many who take on student debt find themselves putting off important life moments, such as buying their first home or investing in a 401(k). With an average accountant salary, it’s important to know whether your student loan debt will delay these other financial investments.

Accountant student loan repayment options

For accountants who want to pay off their student loans quickly, there are a few options. If you end up at a lower-paying job, you might need to compare income-driven repayment or other repayment strategies, like refinancing.

Let’s say you have $30,000 in student loan debt at 6% and a starting accountant salary of $75,000 per year. Here’s how different repayment options would shake out under REPAYE, PAYE, the old IBR plan, and other options.

Based on the calculation and chart above, a private student loan refinance is the best option. Your monthly payments are lower as well as the total amount paid.

If refinancing isn’t a possibility, REPAYE is the next best alternative, based on your total repayment amount. This option, however, stretches monthly payments. PSLF and a standard 10-year repayment are nearly equivalent in total cost, with lower monthly payments than the REPAYE program.

Higher student loan balances change the discussion

Now, if you’re a graduate with a higher debt balance of $45,000 for your bachelor’s and a lower starting salary of $60,000, debt payoff is more challenging.

In a case with higher debt compared to income, PSLF is worthwhile since you’d pay much less than your original debt. Private refinancing is the next-best choice if you don’t work for a nonprofit, adding $8,398 in interest charges.

Is an accountant salary worth the debt?

Look at how much accountants make when deciding whether student debt is worth it. Three primary factors influence this decision:

1. Cost of bachelor’s degree
2. Location of employment
3. Type of accounting job

Cost of degree

A bachelor’s degree in accounting or a related field is a prerequisite for accountants. Your best bet of ensuring salary is worth the debt is to minimize your debt from the start.

Here’s an estimated cost per year at three main types of institutions:

• Public, in-state college: $9,687
• Public, out-of-state college: $21,184
• Private college: $35,087

Obviously, public schools in your home state are the cheapest option for a degree.

To attain the designation of Certified Public Accountant, or CPA, you also need a minimum of 150 semester hours, meaning you’ll complete extra coursework beyond your bachelor’s to be eligible.

Some universities have a five-year program combining your undergraduate and graduate degree to ease the process of getting enough hours for CPA licensure. However you pursue this, those additional hours will cost you the equivalent of an extra year of college.

Besides the semester hours requirement, the fees for review courses and exam registration fees could total at least $1,500 (more if you require multiple retakes of exam sections).

Advanced degrees may also be required for some management positions. A master’s degree in business administration (MBA) or accounting-related field could be beneficial, or you might consider a specialty such as taxation, public administration, or forensic accounting.

The cost of the MBA program can easily be above $100,000 (the Wharton School MBA program for the class of 2024 has an estimated cost of $246,952 total!) You might wish to hold off on that until your career path becomes clearer and you’ve paid off your undergraduate loans.

Location of work

The geographical location of your job impacts how much money you can make as an accountant. Living in a state that rewards accountants more lucratively could help you to pay off your student loans years faster, and reach your income goals more quickly.

The top five states for average accountant salary from May 2022 BLS data are:

• The District of Columbia ($110,750)
• New York ($110,320)
• New Jersey ($102,040)
• California ($96,210)
• Massachusetts ($95,830)

Keep in mind that a higher cost of living often accompanies higher regional salaries. Living in a large city or metro area will cost more day to day than a small town or rural area. Working remotely might also be an option to help you minimize housing and other expenses.

Type of work

Virtually every business and organization needs some level of accounting to manage their financial statements and other financial aspects.

Common industries for accountants include:

• Finance and insurance
• Management of companies and enterprises
• Accounting, tax preparation, bookkeeping and payroll
• Government

A CPA career path qualifies you for many more accounting positions, with potentially higher salaries. The higher standards of a CPA open up doors for career advancement.

All publicly traded companies are required to have a CPA sign off on all financial documents with the Securities and Exchange Commission, which is one reason your CPA license could be beneficial.

Accountant plan for student loan repayment

Accountants should consider the cost of a degree compared to the average salary for accountants. You may be able to qualify for a well-paying job with a bachelor’s degree and minimal student loan debt. But remember that additional degrees or CPA certification adds to your debt.

Accountants who have a high debt-to-income ratio and are concerned about student loan payoff can book a consultation with Student Loan Planner®’s experts. We analyze your loan situation and help you come up with the best student loan repayment solution.