Is an Expensive College Worth the Cost? Here’s One Way to Decide

Best value colleges
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The price of college continues to rise. Along with it, student loan debt is crippling a generation, with the average person leaving school about $30,000 in the hole.

It has to make you ask, is it worth it?

For decades, we’ve been raised to consider post-secondary education as inevitable as K-12. We assume a college degree is valuable enough to pay for itself in the end — but that may not be the case across the board.

Which degrees are worth it? In many cases, that depends on where they come from.

Growing up in a blue-collar town where the majority of our parents never went to college, most of the kids at my high school assumed a state university was our best option after graduation.

The biggest reason? It seemed affordable.

But college is an investment. You have to consider what it will yield, not only what it will cost upfront.

How Do You Measure a College’s Return on Investment?

Simply put, return on investment (ROI) on anything is what you get out of it compared to what you put in.

The overall value of going to college is difficult to calculate, since many of the variables are intangible.

You invest time and energy, and yield experiences, knowledge, relationships and a better understanding of yourself, other people and the world.

We can measure the money, though. What does it cost to go to college, and how much can you make after you leave?

In its 2016 College ROI Report, PayScale measures ROI by calculating how much the median graduate earns in the 20 years after graduation, then subtracting the 24-year median pay of a high school grad (since they’d have an extra four years to work) and the cost of four years of tuition.

Which Colleges Offer the Best ROI?

The report considers a host of financial factors — including tuition and on-campus cost of living, financial aid, graduation rate and household income — to determine the colleges and universities with the best payoff.

Here are the top three:

1. California Institute of Technology (CalTech)

  • ROI = $973,000
  • Cost for four years of tuition = $230,000

2. Massachusetts Institute of Technology (MIT)

  • ROI = $972,000
  • Cost for four years of tuition = $232,000

3. (Tie) Harvey Mudd College AND SUNY – Maritime College

  • ROI = $945,000
  • Cost of four years of Harvey Mudd tuition = $249,000; Cost of four years of SUNY tuition = $89,000

(Taking financial aid into account flips the top two so MIT winds up on top, and Harvey Mudd holds third place all by itself.)

These numbers paint a picture that can help you make a smarter decision when choosing a school. What seems affordable now could end up looking less-than-ideal in hindsight.

For example, my alma mater, University of Wisconsin – Madison, ranks 171st for ROI (in-state, without considering financial aid). It seemed like a smart choice because of the low cost going in. But in the long run, I might be missing out.

If I’d attended Princeton University, which ranks 9th for ROI without financial aid, I would have paid more than twice as much. But, after accounting for the costs, I’d net almost double the money over the 20 years after graduation, so it’s still a better deal.

How to Pay for an Expensive College

Unsurprisingly, about half of the top 10 are prestigious private schools.

One look at the cost to attend these schools might have you running the other way.

Thankfully, the most prestigious schools are probably more affordable than you think.

Many of the people from my hometown might balk at the prospect of attending Princeton because of its price tag.

But they probably don’t know that more than 60% of Princeton students receive need-based grants to cover their tuition, room and board, fees, books, transportation and more.

Similar aid options exist for many of the big-name schools near the top of PayScale’s list, like Stanford, Harvard, Carnegie Mellon, Harvey Mudd, MIT and more.

If programs like these don’t meet your financial needs, here are more ways to get the money you need so you don’t have to settle for a school that might not give you the ROI you’re looking for:

Your Turn: What factors are you considering when choosing a college?

Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. She’s written for Huffington Post,, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).