How Important is Return on Investment When it Comes to College Degrees

Return on investment, also known as ROI, is a term that professionals use when talking about investments. It refers to the amount that you get back for each investment that you make. If you spend $1,000 buying stocks, you hope to make back the minimum amount that you spent or even more. You should also think about your ROI when it comes to attending college. When you spend less on college and make more after graduation, you’ll have a higher ROI than some of your peers.

What is ROI?

Looking at the ROI associated with different schools will give you an idea of how much money you might make when you graduate. Students leaving college often qualify for entry-level jobs, but once you have a few years of experience under your belt, you can move up to a higher paying job. To determine the ROI that each college offers, you need to look at the total cost of the school and the average salaries of alumni as well as some other factors.

What Determines Your ROI?

The first thing you want to look at is the total cost of attendance. While some students just look at tuition rates, you must also look at the cost of traveling between home and school or from work to school, the textbooks you need for your classes and any other supplies you need for special classes, including new software or clothing. When Payscale created a list of best value colleges in the United States and the return on investment of each one, it also looked at the average amount of student loans graduates took out and how much those graduates made over a 20 year span in comparison to how much high school graduates made in that same time period.

Degree vs. College

Though looking at the ROI associated with your college is important, you also need to look at the ROI of your degree too. The highest rated degree programs include those with the highest average starting salaries like engineering and or business degrees. Those professions not only pay workers a higher salary but offer larger benefits packages and help workers move up through the ranks faster too. When Payscale released its list of colleges with the highest ROI, six of the top 10 were private universities. Though it costs more to attend a private college, students usually make more over the course of their careers.

How Important is Your ROI?

ROI is extremely important and one of the things you should look at when selecting a college. It will give you an idea of how much money you need to borrow in the form of loans and how quickly you can pay those loans off later. Even if you receive scholarships and grants, you may still need to take out a few loans. Looking at your ROI will also give you an idea of how much you can expect to make after graduating and how much you’ll spend on your education.


Choosing a college isn’t something you should take lightly. In addition to looking at the degree and course options, you’ll also want to look at how that college can help you in the future. Choosing a college with a high return on investment lets you know that you can spend less on college and make more later.

Related Resources: