Assessing ROI Of A College Degree
In terms of bang for your buck – public colleges may have a better return on investment that previously thought.
An article in the Washington Post cited an article from SmartMoney magazine, which measured the value of colleges by their graduates’ salaries in proportion to the tuition they paid as students.
However, this is only a “value” metric, and SmartMoney magazine admitted that its scale is far from perfect. Its analysis does not take financial aid into consideration. Some colleges post high tuition prices but offer huge scholarships to nearly every student. It’s a marketing ploy.
Many Ivy League schools fall into that category, as they give out enough financial aid/scholarships to most of their students, which end up reducing the net price by half or more. But, the report still offers some general – but valuable – information.
The report measures a college’s graduates’ salaries at two points: one when they just graduate and another at mid-career. It then forms an estimated, averaged salary.
Dartmouth graduates have the highest salaries of all other grads with mid-career earnings at $123,000. Dartmouth, an Ivy League school, has a rich history of producing high-earning graduates. It ranks 21st on SmartMoney’s list of most valuable colleges, which is about the highest ranking for any private university.
Carnegie-Mellon graduates earn the most right after graduation with $62,400, but the university ranks 23rd on the list of overall value, which is still fairly high for a private college.
Sarah Lawrence College has the highest tuition and living expenses in the nation at $148,570. But, that number does not reflect student aid, and Sarah Lawrence College gives out a tremendous amount of student aid. The college’s grads earn a lot of money, and the school ranks at 50 on the overall value list.
The value metric does not consider specific schools within colleges. It only accounts for overall earning figures of all graduates. For example, Purdue, which ranks 7th on the list is a huge engineering school. Engineering is one of the highest-paying fields, and that likely tips the scale in Purdue’s favor.
Again, this list is not completely accurate, and its authors even admit that. This is a good resource to students, but it should not be the only factor in selecting a college.
Here are the top 10 most valuable schools, private and public, according to SmartMoney Magazine.
- University of Pennsylvania
- University of Richmond
- Georgia Tech
- UT Austin
- University of Florida
- University of Georgia
- University of Illinois
- Clemson University
- Purdue University
- Colorado School of Mines
- Miami University (Ohio)
- UC Berkeley