To make an informed decision about college, it helps to know what the future holds in store. Few prospective students and their parents have that kind of crystal ball, but if they're reading this, they have the next best thing: a detailed look at the return on investment that graduates of more than 500 U.S. colleges and universities realized over the past 30 years. It won't predict how much grads will earn 30 years from now, but it does provide a rough benchmark to begin assessing the relative payback of different undergraduate degrees.
ROI is a function of two things: how much one spends getting a degree, and how much graduates earn. PayScale, which collects pay information from individuals who use its online pay comparison tools, examined a huge database of 1.4 million pay reports and information on college costs. It then determined how much graduates of each school earned (after deducting the cost of their degrees) above the typical pay for a high school graduate over the same period. In a very real sense, this is what a college degree from each institution is "worth" in dollars and cents. Some schools are bargains, other schools less so—and not always the ones you would think.
Unlike most other rankings, this one takes into account each school's six-year graduation rate, providing a more accurate way of assessing a school's ROI. For example, graduates of the Georgia Institute of Technology and the University of Notre Dame, after repaying the investment in their respective degrees, both earn almost exactly the same amount over 30 years: about $1.4 million more than a typical high school graduate. But only if you graduate. Notre Dame graduates 96 percent of its students, while Georgia Tech graduates just 77 percent. The result: Georgia Tech's 30-year ROI is far less than Notre Dame's, a still-decent $1.1 million.
What follows is a state-by-state breakdown of the schools with the best ROI, regardless of cost. The competition for the top spot in some states was particularly tough. Stanford was a runner-up in California, Columbia was a third-place finisher in New York, and in Massachusetts, Harvard played second fiddle to MIT. For students in those states, there is a true embarrassment of riches.
Note: Each slide features the top-ranked school from each state. The ranking is based on self-reported pay data obtained through online pay comparison tools; on average, pay reports from about 1,000 individuals were used in the net return calculations. Total cost is the cost of obtaining an undergraduate degree from the featured school in 2009; it does not factor in financial aid and may include up to six years of tuition, fees, room and board, books, and other expenses, depending on how long it takes most students to graduate. The graduation rate shown is a six-year rate for the cohort entering in the fall of 2002. The 30-Year Net Return on Investment is in 2010 dollars and represents the average earnings of a graduate (over and above those of a high school graduate) after deducting the cost of the degree and adjusting for the school's graduation rate. The 30-Year Net Return for Graduates is the same figure, assuming a 100 percent graduation rate. Annualized Net ROI is based on the ratio of the earnings gain from a college degree to the cost of the degree; it takes into account the school's graduation rate and includes wage inflation of 4.3 percent per year. ROI data and total cost supplied by PayScale. Annual tuition and fees, average financial aid package, applicants admitted, and most popular majors supplied by the College Board. For the complete ranking and a more detailed description of the methodology, check out our interactive table.
Data: PayScale, Integrated Postsecondary Education Data System, College Board