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.
Need a student loan?Here are our top student loan lenders of 2018!
|1 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or Nationwide Bank, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 11/1/2018. Variable interest rates may increase after consummation.
2 Important Disclosures for Discover.
3 Important Disclosures for Ascent.
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.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.94% – 12.78%1||Undergraduate, Graduate, and Parents|
|4.06% – 13.06%3||Undergraduate and Graduate|
|4.34% – 12.99%2||Undergraduate and Graduate|
|4.25% – 11.10%*,4||Undergraduate and Graduate|
|5.03% – 11.23%5||Undergraduate and Graduate|
|4.12% – 13.13%6||Undergraduate and Graduate|
|5.62% – 10.01%7||Undergraduate and Graduate|
|3.93% – 9.81%8||Undergraduate, Graduate, and Parents|
|4.26% – 12.13%9||Undergraduate, Graduate, and Parents|