When I was in high school, my teachers told me to search for colleges by size, location, and SAT score requirements. No one ever said anything about return on investment (ROI).
But college is one of the most expensive things you’ll pay for — make sure you’re getting enough bang for your buck.
Why should you care about ROI?
These days, college is more expensive than ever. According to College Board, the average yearly cost of tuition and fees at a private college is $32,410. In-state residents pay $9,410 at public universities, and out-of-state students pay $23,890.
That’s a hefty price tag, and most of us take out student loans to pay for it. After graduating, we need to start paying those loans back.
To make smart financial decisions, think of those loans as an investment. You’re investing in your education now to open up opportunities and get a fulfilling job in the future.
10 best value colleges in the U.S.
What choices can you make to see the best return on your investment? One could be to choose a college with a high ROI.
According to Payscale’s 2016 College ROI Report, these schools rank highest for the best ROI colleges. Drawing on 962 schools, Payscale compared the total cost of attendance (including tuition, fees, room and board, books, and supplies) with graduates’ net ROI after 20 years.
1. California Institute of Technology (CalTech)
The full cost of attendance over four years at CalTech is $230,000, but the 20-year net ROI is $973,000. CalTech is ranked #12 nationally by US News.
In the class of 2020, students scored an average between a 2240 and 2340 on the SAT, and 99 percent graduated in the top 10 percent of their high school classes.
2. Massachusetts Institute of Technology (MIT)
Four years at MIT costs $232,000, and graduates had a 20-year net ROI of $972,000. The college ranks #7 in the country, so most students who get in have top SAT scores and grades.
3. Harvey Mudd College
Four years at Harvey Mudd comes with a price tag of $249,000, and graduates have a net ROI of $945,000. This California college is ranked 21st nationwide.
4. SUNY Maritime College (for both in-state and out-of-state students)
SUNY Maritime is the highest-ranked state school on the list. It’s one of six maritime universities in the U.S. and has 11 undergraduate majors, including engineering, humanities, science, and global business and transportation.
The full cost of attendance is $89,000 for New York residents and $126,000 for out-of-state students. Graduates end up with a 20-year net ROI between $908,000 and $945,000.
5. Stanford University
Stanford is one of the priciest colleges on the list with a four-year cost averaging $240,000. Its graduates net an ROI of $854,000 after 20 years. Its undergraduate admission rate is extremely competitive, at only 4.8 percent.
6. Colorado School of Mines (for in-state students)
The Colorado School of Mines is an engineering school that focuses on geosciences. On average, applicants have an SAT score of 1320. The full cost of four years is $118,000 with a 20-year ROI of $846,000.
7. Georgia Institute of Technology (for in-state students)
For residents of Georgia, four years at the Georgia Institute of Technology costs $91,500. Over 20 years, their net ROI is $833,000. From its applicant pool, the college admits 26 percent.
8. Princeton University
This competitive Ivy League school admits just 6.5 percent of applicants. It has a four-year price tag of $224,000 and a 20-year net ROI of $820,000.
9. Carnegie Mellon University
Carnegie Mellon has the highest price tag on this list, ringing in at $243,000. Graduates go on to net an $811,000 ROI after 20 years.
10. University of California, Berkeley
Finally, UC Berkeley costs $133,000 for California residents, who go on to have a net ROI of $806,000. The school is ranked 20th nationally, and it has a variety of undergraduate and graduate programs.
Unsurprisingly, several of these best value colleges have strong science, technology, engineering, and math offerings, but some liberal arts schools made the top 10, as well.
It’s important to note that not everyone pays the full price of attendance. Most schools offer financial aid and scholarships to reduce the cost. College ROI is a useful metric, but the data may not apply to your specific financial situation.
Does college ROI really matter?
If you’re investing thousands of dollars and four years of your life into college, then you should definitely consider your possible return on investment.
These best value colleges set students up for success in their later careers, but they’re not the only schools that give students a solid return on investment.
There are lots of colleges that will give you a great education and help you achieve your goals. To some extent, a college degree is what you make of it. You should use these years to learn new things, pursue your passions, and set professional goals.
You should also develop marketable skills that will help you land a job after graduation. That way, you’ll be able to pay back your student loans once the grace period ends.
For more on choosing a field of study that pays, check out these seven college majors with the highest return on investment.
How to find the best value colleges for you
There are lots of factors to think about when choosing a college, including size, location, SAT scores, grades, majors, and financial aid. Given the high cost of tuition, return on investment should also join that list.
Thinking about college ROI early will also help you get a job you want. According to the Federal Reserve Bank of New York, 45 percent of recent college graduates are underemployed. That means almost half of recent grads hold jobs that don’t require a Bachelor’s degree at all.
Why invest in a college degree if you can’t use it? While economic forces are out of your control, you can choose where you apply to college and what major you pursue.
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2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a first year graduate student borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 5/18/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
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Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
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6 Important Disclosures for Citizens.
Undergraduate Rate Disclosure: Variable interest rates range from 3.54%- 6.40% (3.54% – 6.40% APR). Fixed interest rates range from 3.79% – 6.65% (3.79% – 6.65% APR).
Graduate Rate Disclosure: Variable interest rates range from 2.72% – 6.11% (2.72% – 6.11% APR). Fixed interest rates range from 3.49% – 6.36% (3.49%-6.36% APR).
Business/Law Rate Disclosure: Variable interest rates range from 1.47% – 8.35% (1.47% – 8.20% APR). Fixed interest rates range from 4.45% – 10.74% (4.45% – 10.59% APR).
Medical/Dental Rate Disclosure: Variable interest rates range from 1.47% – 7.25% (1.47% – 7.10% APR). Fixed interest rates range from 4.40% – 9.64% (4.40% – 9.49% APR).
Parent Loan Rate Disclosure: Variable interest rates range from 3.09%-6.23% (3.09%-6.23% APR). Fixed interest rates range from 5.48%-8.52% (5.48%-8.52% APR).
Bar Study Rate Disclosure: Variable interest rates range from 4.79% – 9.93% (4.79% – 9.85% APR). Fixed interest rates range from 7.39% – 12.94% (7.39% – 12.82% APR).
Medical Residency Rate Disclosure: Variable interest rates range from 3.88% – 7.38% (3.88% – 7.04% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.08% APR).
Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of May 1, 2020, the one-month LIBOR rate is 0.44%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.
Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
|2.00% – 10.01%*,1||Undergraduate and Graduate|
|1.49% – 11.98%2||Undergraduate, Graduate, and Parents|
|3.18% – 13.92%3||Undergraduate and Graduate|
|2.09% – 11.49%4||Undergraduate and Graduate|
|3.52% – 9.50%5||Undergraduate and Graduate|
|3.54% – 6.40%6||Undergraduate and Graduate|