Strategies to Improve ROI for Your College Degree
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College costs rose by 169%, according to data from the US Bureau of Labor Statistics, the US Census, and the National Center for Education Statistics. Meanwhile, wages for workers aged 22 to 27 only grew by 19%.
So, is college really still worth it? YES! A new study conducted by economists from the Federal Reserve Bank of St. Louis found that earning a college degree is still a great financial investment. Ultimately, the ROI for your college degree will depend on your choices.
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The return on investment in education is all about balancing what you put in with what you get out. In this guide, we’ll walk you through practical strategies for maximizing college ROI, from choosing the right degree to managing costs and boosting your career potential.
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- Long-Term ROI: How Degree Choice Impacts Lifetime Earnings
- ROI Comparison: Public vs. Private Colleges
Understanding ROI in Education
So, what is college ROI?
According to FREOPP, return on investment for a degree refers to the increase in lifetime earnings a student can expect from a specific degree program, minus the expenses. There are several factors affecting college ROI:
- Tuition: Tuition is the amount you pay for classes, school fees, and other costs related to your education. Generally, higher tuition means a higher upfront cost, which can be a big consideration when deciding where to go.
- Financial Aid: Financial aid helps reduce tuition costs. You can find it in the form of scholarships, grants, or loans. Scholarships and grants don’t need to be repaid, and they can make a huge difference in ROI. On the other hand, loans can affect your ROI if you’re borrowing large amounts, as paying off loans over time can be expensive.
- Job Prospects: The job market and demand for workers in your field play a big role in determining your ROI as well. Some degrees, like nursing, engineering, or computer science, typically lead to strong job prospects because these industries have a high worker demand. In contrast, degrees in fields with lower job demands might make it harder to find a well-paying job after graduation, which can lower your ROI.
- Starting Salaries: Starting salaries after graduation is key to calculating ROI. For example, if you graduate with a degree in software engineering, you might land a job that pays $70,000 per year, while someone with a degree in social work might earn $40,000. If your degree leads to a high-paying career, you can expect to pay off your tuition and any student loans more quickly. However, if your starting salary is low, it will take longer to recover your investment in education, which can affect your ROI in the long run.
Choosing the Right Degree Program
Choosing a degree with high ROI takes a lot of effort and careful consideration. Here are a few practical tips on how to increase your chances of having a high ROI.
- Consider High-Demand Fields: You want to pick a field where companies always look for new talent. Think about industries like healthcare, tech, or business—these areas are vastly growing, and they’re always looking for skilled workers.
- Market Trends: Before you dive into any degree program, take a minute to look at what’s happening in the job market. Which industries are booming, and where is the demand skyrocketing? High-demand college majors with high and stable market trends include:
- Engineering
- Computer Science
- NursingPhysics
- Information Technology
- Finance
- Aligning with Personal Goals: While chasing after the best degrees for ROI is tempting, it’s also important to think about what you’re passionate about. If you’re truly excited about your field, you’re more likely to stay driven and excel in it.
- Avoiding Low-ROI Degrees: Some fields may not offer as many job opportunities or high-paying roles, even though they might initially seem appealing. Do your homework to understand which degrees have a higher chance of landing you a stable, well-compensated job, and be cautious of ones that could limit your options down the road.
Reducing Education Costs
Scholarships and Grants
One of the best ways for reducing college costs is landing free money, which means scholarships or grants. Start with your school’s financial aid office, then branch out to national and local opportunities. Most scholarships ask for similar materials, like:
- An application (either paper or online).
- Essays, often personal statements, that showcase your activities in and out of class.
- Letters of recommendation, ideally from teachers, coaches, and mentors.
- Any honors or awards you’ve earned.
- Info about your school, like your transcript or GPA.
- A résumé with work, volunteer, or extracurricular experience.
Community College Pathways
Many students use community colleges or other two-year schools as stepping stones to affordable degree programs at four-year colleges. This strategy can save them thousands on general education courses.
But you need to be aware that not all two-year courses transfer to a four-year college. Here’s what you should do:
- Meet with your adviser each semester to ensure your classes will transfer.
- Sign up for a transfer program at your 2-year college to align your courses with a 4-year school’s requirements.
Online and Hybrid Programs
Online degrees are often cheaper than traditional programs and offer flexibility. Hybrid programs can also save you money and time. Online education has come a long way in terms of quality and credibility, with many top schools now offering robust online options.
Work-Study Programs
These programs let you earn money while gaining valuable work experience. Whether it’s an on-campus job or a role in your field, work-study can help offset costs. Not only does this reduce reliance on loans, but it also adds valuable experience to your resume.
Avoiding Student Loan Debt
The less you borrow, the better. Focus on:
- Applying for grants and scholarships.
- Budgeting wisely during college.
- Paying off interest while you’re still in school, if possible.
Maximizing Career Potential After Graduation
Internships and Co-op Programs
Internships are great for maximizing career ROI. They give you hands-on experience and help you build connections in your industry. Many internships lead graduates directly to job offers right after graduation. A co-op program, which alternates semesters of work and study, can also provide invaluable real-world experience and income.
Networking
It’s not just about what you know but who you know. In addition to finding internships for college students, we also recommend attending career fairs, joining student groups, and connecting with alumni. Building these relationships can unlock opportunities you didn’t even see coming.
Resume and Interview Skills
Your resume is your first impression—make it count. Here are a few important tips:
- Highlight relevant experiences, transferable skills, and accomplishments.
- Tailor your resume for each job application and use action verbs to describe your achievements.
- Practice your interview skills so you’re ready to impress potential employers.
Continuing Education
Learning doesn’t stop at graduation. Certifications, workshops, and advanced degrees are great for boosting post-college earnings and sharpening your skills. For example, an MBA can open doors to leadership roles, while a coding boot camp can help pivot to tech careers.
Job Market Research
Before accepting a job offer, learn the average salary for your position and location. Don’t be afraid to negotiate—even a small bump in your starting salary can add up over time. Websites like Glassdoor and Payscale can provide valuable insights into compensation trends.
Tracking and Evaluating Your ROI Over Time
Here are a few important tips for evaluating ROI for a degree:
Calculating ROI for Education
The first step in calculating ROI for education is to compare your earnings to your education costs. Use online tools or simple formulas to calculate ROI. For example:
ROI = (Lifetime Earnings – Total Education Costs) / Total Education Costs
Monitoring Financial Progress
Keep tabs on your income and expenses. Monitor your savings as well. Tools like budgeting apps or financial planners can help you stay on track. Setting benchmarks—like paying off a certain percentage of loans within five years—can also keep you motivated.
Adjusting Career Plans
If your ROI isn’t where you want it to be, don’t panic. Look for ways to pivot:
- Upskilling through certifications or short courses.
- Exploring higher-paying roles in your field.
- Considering geographic relocation for better opportunities.
Building Long-Term Wealth
Once you’ve established your career, focus on building financial security. Invest in retirement accounts, diversify your income streams, and plan for future goals. A solid financial foundation enhances the long-term college ROI. Consider getting a financial advisor to optimize your investments and savings strategy.
Conclusion
Knowing the right strategies for college ROI is important if you don’t want to spend years regretting your decisions. Improving ROI for your degree requires careful planning and smart financial decisions. You can make the most of your college investment by selecting the right degree program, managing costs, and enhancing career opportunities.
Explore resources like Value Colleges to find more college degree investment tips.
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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.