How Do I Find out my College's Return on InvestmentReturn on investment is a term that experts use when referring to the amount of money they can make off an initial investment. If you spend $5,000 to open a new business and make $20,000 in the first year, you’ll have a high ROI.

While many people think that this term only applies in business settings, it actually applies to your college education as well. Making more money after graduating and spending less in college gives you a higher return. You can find out more about this topic and get an idea about the ROI of the college you want to attend.

Total Cost of Attending College

The first thing you need to consider is the total cost you will spend to earn your degree. Many students focus only on tuition costs without factoring in other expenses. In addition to paying your tuition, you will also need to buy a meal plan and pay for a dorm room when you live on campus. The amount you spend on expenses after moving off campus may be higher than you paid while on campus. You also need to consider the amount that you spend on miscellaneous fees, textbooks and school supplies.

Amount You Can Make

You cannot figure out the return on your investment without thinking about how much you’ll make in the coming years. Most organizations that determine the ROI of colleges compare the average or median salary that graduates make with the average or median salary of those who did not go to college. When you subtract your total expenses from the amount you make, you see the overall return on your investment. Some students make hundreds of thousands of dollars in the first few years after graduating from college.

Other Factors to Consider

As you determine the return on investment of your college, you need to think about factors beyond how much you spent and how much you make. You should also factor in the amount of loans you took out to attend that school. The cost of attending college can now equal more than $30,000 a year at a private school and between $10,000 and $20,000 a year at a public school. The more money you borrow to pay for your schooling means less money that you make later. You’ll need to subtract your loans from the total amount you earn.

Where to Find ROI Information

The best place to find ROI information about different colleges is online. Payscale releases a list every year that shows the ROI students receive at different schools across the country. The data includes the average salary that students make within 20 years of graduating in comparison to the amount high school graduates make in that same time period. You can also get information on the average amount of loans students take out, how many students graduate and how long it takes to graduate. In 2015, Payscale found that seven of the 10 schools with the highest ROI were private colleges.

Many students make a decision regarding where to go to college based on how much that school costs. Loans, scholarships, grants and other programs can help lower your total costs. When choosing the best college for you, you should focus more on its return on investment and how much a degree from that school will help you financially.

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