Payscale.com recently ranked U.S. colleges based on return on investment (ROI) over high school graduates, that is how much more college graduates earn than high school graduates on average over a span of thirty years minus the cost for college attendance.
The figures are calculated with voluntary reports from graduates who did not seek post-graduate education, and they extrapolate from the past. If a school has recently changed its offerings profoundly, the numbers may be misleading. The ROIs are adjusted for length of study, drop-out rate and inflation. Costs for interest accrued on student loans are not included.
Payscale.com's list is ranked by thirty-year net ROI. The top ten exclusively consist of private institutions of higher learning. Prestigious engineering schools are in the lead. This is not surprising, because engineers seek post-graduate degrees less frequently than graduates with other majors and draw high salaries. Ivy League members constitute half of this group.
More intriguing, however, is the ranking by annual ROI (table below). This number represents the average return per year as percentage of the cost of college attendance. Only one private school can be found among the top ten of this list. The rest are public schools. In-state students garner the best return for their investment. Taking the high cost of student loans for private institutions into consideration, good public schools undoubtedly offer the best deal economically.
Colleges Worth Your Investment - Top Ten by Annual ROI
|School Name||School Type||Average Cost for College & *Fed. Loan Debt in '09 [$]||30 Year ROI [2010 $]||Rank ||Annual ROI [%]||Rank |
|Georgia Institute of Technology||Public (In-State)|| 79,140.- |
|Brigham Young University||Private|| 58,450.- |
|University of Virginia||Public (In-State)|| 74,410.- |
|College of William and Mary||Public (In-State)|| 74,720.- |
|Colorado School of Mines||Public (In-State)|| 95,740.- |
|Virginia Polytechnic Institute and State University||Public (In-State)|| 83,270.- |
|University of Michigan||Public (In-State)|| 84,690.- |
|University of California at Los Angeles||Public (In-State)|| 94,100.- |
|University of California, Berkeley||Public (In-State)||118,900.- |
|University of North Carolina at Chapel Hill||Public (In-State)|| 61,830.- |
- State prepaid college tuition and fees plans, also known as 529 college savings plans, are designed to pay towards tomorrow's college tuition and fees at today's price, plus provide a tax rebate. Considering the steep rise of tuitions and fees at public schools in the past decade alone, the plans seem a sensible choice for parents to keep their children's student loan debt low. However, as Jessica Toonkel and Jilian Mincer report in their post with the title "Prepaid college plans: shrinking options, rising risks" published online on Reuters today, some plans have lost on investments, are underfunded and may fall short in their promises, despite legislative guaranties. Regardless, the Virginia529 College Saving Plan appears to be one of the safest, providing an additional benefit to students at the University of Virginia, the College of William & Mary and other institutions of higher learning in this state (01/11/2012).
- Alan Silverleib and Tom Cohen, report a new higher education initiative of the Obama administration aimed at improving outcome in their article with the title "Obama unveils plan to control college costs" published online on CNN today. The President announced the reform at the University of Michigan, which is on the top ten list above. Hopefully, this overhaul will benefit students at good public schools (01/27/2012).
- Stephanie Simon reports in her post with the title "U.S. college ratings game set for shakeup" published online on Reuters yesterday that the recent scandal surrounding falsely reported SAT scores at Claremont McKenna College, a the prestigious private college on the West Coast, may deeply affect how institutions of higher learning are judged in this country (02/04/2012).
- Jack Hough's insights in his article with the title "'Investing' in College? It Pays to Think Like an Investor" published online by The Wall Street Journal yesterday are well in tune with the thoughts in my post (05/05/2011).
- Based on a student survey conducted by ratemyprofessors.com, Robert Franek, Laura Braswell and the staff of The Princeton Review compiled a list of the 300 best professors at US institutions of higher learning along with professor and school profiles. The list was published in softcover by Random House this year and is quite informative. For example, Harvard University (private; annual tuition: $34,976.-) contributes two professors to the list. By contrast, The College of William and Mary (public; in-state tuition: $13,132.-; out-of-state tuition: $35,409.-) is home to ten such professors (05/23/12).
- Anna Prior and Matthew Heimer's article with the title "Which colleges help grads snare top salaries?" published online by marketwatch.com yesterday completely affirms the basic conclusion of my post that good public schools deliver most bang for the buck (09/26/2012).