What’s the ROI of a college degree?

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Call it what it is: attending college is an investment. Hopefully, it’s a good one, and we can help you with that, but in order to really understand the importance of Return On Investment (ROI) we’ll need to break down the term for how it applies in the education world.

roi college

What is ROI?

Understanding the ROI for a college degree is a lot trickier than, say, investing in a business or a mutual plan. You can’t point to a spreadsheet showing how much money you’ve made off your initial investment, or how much your business has grown from its creation.

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There are a lot of factors to take into consideration. You invest a lot more than just money into a college education – you invest time, work, and stress. That makes college fundamentally different from many other investments.

ROI could be as simple as what income people make vs. what they paid for college and what they owe in student debt, but that is still too simple. Income isn’t necessarily a measure of success, and student loan debt could just mean you took out more loans than you needed, not that the school was too expensive. While some short sighted people just want to know how much money they can make straight out of school, others want a certain level of long-term career satisfaction. Neither is wrong.

Plus, as Chris Maples, president of the Oregon Institute of Technology explains, there are a lot of different investors in an education, too – not just you, but your family, the foundations that provide grants and scholarships (who don’t want to see their money wasted), the government (which needs the taxes you’ll pay from the work you do with your degree), and the institutions themselves, who put a lot of thought into who they accept and who expect their graduates to prove their worth. You may be fulfilled tending bar with your Ivy League education, but they’re not putting you in the alumni newsletter.

Where Do You Find ROI Information?

Did you know 70% of graduating seniors will enter the workforce with an average student loan debt of $29,400? This is why students are prioritizing how their school ranks as far as ROI is concerned. If you can’t make money to pay the loan, sorry, but you’ve just invested poorly.

Here’s where a resourceful website comes in: Payscale.com. The website was developed to help people obtain real-time information on market compensation. Payscale conducts employee surveys (40 million reported!) which reflects the value of the school based on average total costs, financial aid, and salary levels of its graduates. 

ROI Data Variables

They break things down into the following data variables:

  • cost – This is total expense of tuition and fees, room and board  to complete 4-year degree.
  • 30 year net ROI– The amount of money earned by an individual over the course of 30 years minus the total tuition cost.
  • 30 year ROI with aid– this figure will be the same as 30 year net ROI, except net (not total) college cost are subtracted from his or her career earnings.
  • percentage of students receiving financial aid– That’s loans, grants, scholarships, and other monetary rewards used to finance total education cost.
  • average aid amount–  This number is a calculation of all aid divided by the number of students receiving aid.

Some of the rankings are quite shocking. An average, no-frills public college may have a higher ROI than a college like Harvard! For example, the top 10 in one of their most recent rankings, Colleges Worth Your Investment lists 5 private colleges and 5 public colleges. Oddly enough, a school like SUNY Maritime College, a public research university, is rubbing elbows with Stanford University, a private Ivy league!

Ultimately, as Maples says, ROI for college “is in the eye of the beholder.” Only you can decide what you’re willing to invest, and what you will be satisfied with getting out of the experience. But having an idea about the bottom line will help you make a reasonable, financially sound choice.


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Aya Andrews

Editor-in-Chief

Aya Andrews is a passionate educator and mother of two, with a diverse background that has shaped her approach to teaching and learning. Born in Metro Manila, she now calls San Diego home and is proud to be a Filipino-American. Aya earned her Masters degree in Education from San Diego State University, where she focused on developing innovative teaching methods to engage and inspire students.

Prior to her work in education, Aya spent several years as a continuing education consultant for KPMG, where she honed her skills in project management and client relations. She brings this same level of professionalism and expertise to her work as an educator, where she is committed to helping each of her students achieve their full potential.

In addition to her work as an educator, Aya is a devoted mother who is passionate about creating a nurturing and supportive home environment for her children. She is an active member of her community, volunteering her time and resources to support local schools and organizations. Aya is also an avid traveler, and loves to explore new cultures and cuisines with her family.

With a deep commitment to education and a passion for helping others succeed, Aya is a true inspiration to those around her. Her dedication to her craft, her community, and her family is a testament to her unwavering commitment to excellence in all aspects of her life.

Find your perfect value college

ValueColleges.com is an advertising-supported site. Featured or trusted partner programs and all school search, finder, or match results are for schools that compensate us. This compensation does not influence our school rankings, resource guides, or other editorially-independent information published on this site.

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