Choosing a College Based on its Return on Investment

PayScale has published its 2014 College Return on Investment (ROI) Report and the information is stunning. The argument on how important and valuable college is is one that has been debated for years. But, this report provides numbers and statistics that prove that college offers a real value that people can’t afford to pass on. These numbers can also help you choose the school that will best help you prepare for your future.

What is ROI?


Return on investment (ROI) is the term used to describe the value or benefit you see from an investment. A common example is the stock market. When you invest in the stock market, you expect to make a profit. The amount you make back is your ROI.

College also has an ROI and when you understand what it is, you understand just how vital a college degree is. When you graduate from college, you gain an educational foundation, new skills, an understanding of an industry, insight into relevant theories and a degree to prove to employers that you are a valuable asset. These could all be classified as returns on your investment.

Another ROI you’ll see from college is the ability to earn a higher salary. Those who earn a college degree qualify for higher-paying jobs and promotions. When you make the decision to earn your degree, you are making an investment that has high returns in terms of potential earnings throughout your career.

Colleges with the Best ROI

As you decide what college to attend and what kind of degree to earn, an important factor to consider is how they will impact your future career and earning potential. You want to make a wise decision that will help you get a job you love and earn more money.

PayScale’s report makes comparing colleges and types of degrees based on their ROI easy. The report allows you to sort colleges and their ROI by financial aid, type of housing costs, state, tuition type, education category and even major. This is an incredible resource as you decide what kind of degree to earn and which school to attend, as you can easily find out how your degree will impact your future earnings.

The report defines ROI as the amount you can earn in the 20-year period after you graduate, minus what you could have earned with a high school degree, college costs and financial aid (if you decide to sort the report that way).

According to the report, the 10 colleges that offer the highest ROI are:

  1. Harvey Mudd College
  2. California Institute of Technology (Caltech)
  3. Massachusetts Institute of Technology (MIT)
  4. Stanford University
  5. Colorado School of Mines  (In-State tuition)
  6. Georgia Institute of Technology (In-State tuition)
  7. Rose-Hulman Institute of Technology (RHIT)
  8. Polytechnic Institute of New York University (NYU-Poly)
  9. Stevens Institute of Technology
  10. Colorado School of Mines (Out-of-State tuition)

Each of these schools brings you the biggest return your investment, or what you pay for your degree and other college costs. You can sort the report to reflect your situation and find schools that will bring the best return and help you get the most out of your degree.

The report also reveals which schools bring the highest returns for several different categories. The school with the highest ROI in each category is:

  • Art, Music & Design – Academy of Art University
  • Business – Babson College
  • Sports – Stanford University
  • Religious – Manhattan College
  • Engineering – Harvey Mudd College
  • Liberal Arts – Harvey Mudd College
  • Ivy League – Princeton University
  • Research – California Institute of Technology (Caltech)

These are just the top schools in each category, and the report ranks hundreds of colleges. In fact, you can even find the top “party” or “sober” schools based on their ROI.

What These Rankings Mean for You

If you’re thinking about going back to college you’ve probably seen dozens of lists that rank colleges according to all kinds of categories, but this list is especially important. As you decide what kind of degree to earn and where to enroll, one of the most important factors to consider is how valuable your degree will be and what kind of salary it can help you earn.

There’s no question that going back to school is an investment, so why wouldn’t you make sure you’re making the best decision and enrolling in a school that will bring the highest returns?