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Thu May 2, 2013, 10:29 AM

The ROI of college: Is going to an expensive school worth it?

By Ritchie King

It may seem crass to think of a bachelorís degree simply as a financial investment. Yet, with the cost of US college tuition increasing rapidlyóand interest rates on student loans following suitóit seems more and more sensible to consider the financial payback of a given school along with its academic prestige and the intangible qualities that give it character.

Payscale, a consultancy that specializes in employee compensation, recently released a report of the net 30-year return on investment of 1,070 American colleges and universities. Given a school, the report shows how much more each graduate can expect to make than somebody with a high school diploma, minus how much she paid for her degree. Hereís a list of the top five schools by ROI:

They are all engineering schools, but itís not just because engineers make a great salary. To isolate the impact of each school, the report only looks at graduates who have earned bachelorís degrees and did not go on to earn a masterís, PhD, or any other advanced degree. That rules out doctors, lawyers, and MBAs, but it doesnít exclude many licensed engineers. If you take out the engineering schools, the list instead looks like this:

So does it make sense to go to an expensive school? Do you end up making more in the long run? The short answer is yes. Hereís a chart of the expected net 30-year return plotted against the total cost of a bachelorís degree for each of the schools in the report. (Note: for public schools, only the in-state costs are represented.)


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Reply The ROI of college: Is going to an expensive school worth it? (Original post)
n2doc May 2013 OP
Nay May 2013 #1
FBaggins May 2013 #2
Nay May 2013 #3

Response to n2doc (Original post)

Thu May 2, 2013, 10:43 AM

1. It would be hard to tease out of these statistics how much two other factors involved in

attending a prestigious school:

1. The prestige factor itself, and

2. the opportunity for students at prestigious schools to network with rich/prestigious/connected students and their families, and secure a good job from simply associating with well-connected people.

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Response to Nay (Reply #1)

Thu May 2, 2013, 11:00 AM

2. More than that

There's no easy way to break out from that statistic just how much of the increase can actually be atributed to the school.

People who can get accepted to top schools are also far more likely to be the types of people who would be more sucessfull without that particular school (or perhaps any school at all).

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Response to FBaggins (Reply #2)

Thu May 2, 2013, 11:20 AM

3. Oh, very true. It's not like these schools take just anybody. You do have to be uber smart,

and to act as if lesser-rated schools have the same quality of students as a top-rated school is a big stumbling block to these statistics. Maybe the gist of the piece is aimed toward the students who COULD have a shot at being accepting into top schools; this gives them a reason to justify the cost. If they can get in, it will be worth it.

But that brings me to my points--if we compare the success rates of similarly-rated students, one group who attended a top school and one group who did not (for reasons unrelated to their intelligence, drive, or personality, we could maybe separate out the reasons why the top schools deliver.

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