5 Ways to Maximize the ROI on Your College Degree
By Beth Dumbauld
You’ve been told college is good for you. You need to go to college. You must go to college. If you don’t go to college, you will be left behind in terms of career opportunities and lifetime earnings. It’s a bunch of hype, right?
Actually, no. The benefit of earning a college degree isn’t a bunch of hype. Whether you go to an, or graduate from a more traditional “brick and mortar” type of school – going back to college is quite possibly the best thing you can do for your career and lifetime earning potential. In fact, the typical bachelors degree recipient can expect to earn about 66% more during a 40-year working life than the typical high school graduate over the same 40-year period.1
Yet, for many prospective students, even those focused on taking distance learning courses, facing the upfront tuition costs of college can be daunting. And why shouldn’t they be? 67% of students graduating from 4-year colleges and universities take home an average student loan debt load of $23,200.2 Without a long view perspective, it may seem inevitable that going back to college forces you to take on an overwhelming amount of debt. That going forward, any extra money you make by earning your degree will be far overshadowed by the burden of student loan payments.
It doesn’t have to be this way. College can provide a great ROI for you, and can even be improved with a little financial diligence and making choices that help you save money on college. Rest assured, you can go to college and feel confident your money and time is being invested wisely.
Here Are 5 Guaranteed Ways to Improve Your Return on Investment (ROI) for College
1. Attend School at One of the College Tuition ROI Leaders
PayScale recently reviewed nearly 700 colleges and universities to calculate your tuition ROI (return on investment) – what you get back compared to the cost of attending college. Though this study wasn’t comprehensive enough to include all US colleges, it did incorporate data from most public state universities as well as other popular private colleges. The depth of its methodology3 is useful as well; it kept the study limited only to employees and alumni who earned bachelors degrees exclusively, so the data would not be skewed by earnings of those with advanced degrees, such as doctors and lawyers, etc.
According to PayScale, here are the College Tuition ROI Winners by Category4:
- Top Private University: California Institute of Technology, $1,713,000 (30 year net ROI), 12.2% (Annual ROI)
- Top Engineering University: Harvey Mudd College, $1,622,000 (30 year net ROI), 11.9% (Annual ROI)
- Top Business College: Babson College, $1,240,000 (30 year net ROI), 11.1% (Annual ROI)
- Top Liberal Arts University: Amherst College, $1,138,000 (30 year net ROI), 10.8% (Annual ROI)
- Top Arts, Music & Design College: Rhode Island School of Design, $618,700 (30 year Net ROI), 9.4% (Annual ROI)
1 College Board Education Pays 2010: LIfetime Earnings, p1.
2 Project on Student Debt, Quick Facts about Student Debt, 1/2010, p1.
3 PayScale, PayScale 2011 Return on Investment Data Package: Methodology and Notes, 2011, p1.
4 PayScale, Make Sure Your College Tuition Pays You Back, 2011.