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

By Ritchie King

It may seem crass to think of a bachelor’s degree simply as a financial investment. Yet, with the cost of US college tuition increasing rapidly—and interest rates on student loans following suit—it 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. Here’s a list of the top five schools by ROI:



They are all engineering schools, but it’s not just because engineers make a great salary. To isolate the impact of each school, the report only looks at graduates who have earned bachelor’s degrees and did not go on to earn a master’s, PhD, or any other advanced degree. That rules out doctors, lawyers, and MBAs, but it doesn’t 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. Here’s a chart of the expected net 30-year return plotted against the total cost of a bachelor’s degree for each of the schools in the report. (Note: for public schools, only the in-state costs are represented.)



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