College is definitely, at least in most cases, a pricy proposition. Attending community college or earning substantial scholarship awards can defray the financial costs of college, but higher education demands a considerable time commitment as well.
Considering just how much college students (and their families) invest in higher education, questions about the return on that investment only make sense. Any attempt to evaluate potential ROI from attending college requires the juggling of a variety of complex terms along with a stomach for uncertainty. College major alone dramatically influences potential earnings after graduation. What other factors should smart shoppers consider?
Net Price
Net price is the average cost of attendance, which includes tuition, fees, books and supplies, and living expenses, minus aid received from all sources.
Net Present Value (NPV)
The net present value is how much a sum of money in the future is valued today. This metric includes costs, future earnings, and the length of time it would take to invest and earn a specific amount of money over a fixed horizon. NPV is the kind of variable you might evaluate over periods of 10, 15, 20, 30, and 40 years.
Graduation Rate
Graduation rate is the rate at which full-time, first-time students complete their credentials within 150 percent of the expected time (i.e., the percentage of students who earn a bachelor’s degree within six years)
Carnegie Classification
A system begun in 1970 by the Carnegie Commission on Higher Education to classify 2-year and 4-year colleges by their common attributes, such as the most prevalent degree, whether they offer graduate degrees, and the level of research activity that takes place there.
Of course, these are only some of the myriad factors to consider, which makes this whole exercise rather complicated for those of us who are not data scientists. Fortunately, the Georgetown University Center on Education and the Workforce (CEW) took on the Herculean task of crunching all the numbers necessary to rank 4,500 colleges and universities by return on investment. You’ll find no end of data to deep dive into in their 2022 Ranking 4,500 Colleges by ROI report.
If, however, you’d like a valuable overview and introduction to how to sift through this wealth of information, start by listening to my conversation with educational researcher Martin Van Der Werf of CEW about the report’s big picture insights and implications.
Mike Bergin