5 Ways to Maximize the ROI on Your College Degree Part 3
3. Think about Financial Aid Holistically
When it comes to financial aid, what seems to make the most sense doesn’t always make the most cents. Many students look at the published rate of tuition and fees and assume that the cost of their preferred college is way beyond their budget. That’s not necessarily true. It’s what you ultimately are obligated to pay, your true cost after financial aid, that matters.
When it comes to measuring ROI, schools that have the same sticker price, but differences in the amount of grant aid awarded as well as the number of students receiving it, can provide students with much larger returns on investment. For example, although Boston College and Boston University have annual costs that are almost identical, Boston College graduates earn nearly $150,000, or 16 percent, more than those at Boston University. According to BusinessWeek, “There are no doubt many reasons having to do with majors and career choices, but the fact that aid recipients at Boston College receive $6,000 more in grant aid each year than their Boston University counterparts surely doesn't hurt.”6
This illustrates a crucial point. When it comes to financial aid: grants and scholarship aid will always win out over school loans. It’s simple math. Grants and scholarships reduce your overall out-of-pocket cost of college dramatically -- and you don’t have to pay them back. Loans, on the other hand, require you to pay them back, with interest, over the life of the loan.
Finally, when financial aid is factored in, you may find that many higher-priced colleges and universities come out on top over ones that offer lower published tuition rates. Apply to the programs that you think are the best fit for you, and compare financial aid packages. You may be surprised which schools offer the best financial aid.
Top 5 College Tuition ROI Winners when Financial Aid Packages are Factored In7:
- University of Virginia (UVA), Public In-State, 17.5% (Annual ROI with Financial Aid)
- Georgia Institute of Technology, Public In-State, 16.5% (Annual ROI with Financial Aid)
- The College of William and Mary, Public In-State, 16.1% (Annual ROI with Financial Aid)
- Princeton University, Private, 15.9% (Annual ROI with Financial Aid)
- Harvard University, Private, 15.8% (Annual ROI with Financial Aid)
6 Bloomberg BusinessWeek, College ROI: What We Found, 4/2011, p2.
7 PayScale, Make Sure Your College Tuition Pays You Back, 2011.