Anthony Carnevale, Ban Cheah and Martin Van Der Werf:

As college costs and student loan debt continue to rise precipitously, more people are wondering if college is worth it. Based on earnings alone, yes, it is. On average, workers with a bachelor’s degree make 80 percent more than workers with no more than a high school diploma.1 At the same time, the potential benefits, as well as the costs, vary notably by institution, program, and field of study, and students should be informed about the potential costs and benefits of their choices.2

It is difficult to talk about the return on investment (ROI) of college in

the same terms as other financial investments.3 Investing in a college education has greater immediate effects on a person’s life than investing in the stock market; however, a college degree provides no tangible asset, unlike investing in a home.4 It may take years for the investment to pay off, since the value of the degree lies in what a person does with it.5 Investing in college entails some risk: most students go into debt to pay for college.

However, while much has been written about student debt, not all debt

is bad. Some colleges with high average student debt also have high graduation rates leading to high earnings. Students who stay in school for four years (or longer) will logically accumulate more debt than students who stay a year and then drop out. College also has non-monetary

benefits. A college credential is often essential for starting or changing

a career. Once enrolled, college students might discover a new career field that changes their goals and opens their future, or they might make friends who later help their careers or increase their quality of life. The emotional and financial aspects of deciding whether and where to attend college makes it a hard decision to parse using the same factors as other investment choices.

College is expensive, and as with all expensive investments, the potential return is a key consideration when choosing where to enroll and what to study. Potential students should consider how much it will cost to obtain a credential, and how much they could potentially earn with it. They should also consider the time required to get the degree, the net price, the convenience and location of the program, the likelihood that they

will graduate, and the amount of time needed to get traction in a career and to reach prime earning age.6 In addition, they should consider the net present value (NPV)7 of their potential future earnings, weighing the costs of investing in college now against the potential gains over time.

This report provides information about some of these factors by ranking colleges according to return on investment, using new data from the expanded College Scorecard, an online database started in 2015 to give more information about colleges.8 This report focuses on net present value from college, which was calculated by assuming that earnings 10 years after first attending are a reasonable proxy for future earnings. We also assumed that the total investment is reflected in the total cost of college, which the College Scorecard provides as the average annual net price.9 Debt calculations and values are included in some of our tables because student debt has become a focus of public attention.10