Families and prospective students are paying more attention to the value of a college education in the job market.
The value of a college education does not just refer to the quality of education. At a time when the average college student leaves the campus with upward of $30,000 in student loans, families and students are paying more attention to the value of college education in the job market.
By that yardstick, Harvey Mudd College is tops for its 20-year return on investment for Bachelor’s programs, according to PayScale’s 2015 College ROI Report rankings. Based in Claremont, CA, Harvey Mudd College, a private institution with just over 800 undergraduates, costs about $237,700 to attend for four years. The annual ROI is 8.7 percent for a total return of $985,300 over 20 years, the PayScale survey figures.
At No. 2 is Pasadena, CA-based research university California Institute of Technology. The two-decade ROI is 8.6 percent, or $901,400. At third is Hoboken, NJ-based Stevens Institute of Technology. At a four-year cost of $232,000, its 20 year ROI is $841,000.
Even though paying for college is a primary financial concern, a majority of Affluent households choose an institution of higher learning for their child or grandchild based on the quality of education rather than the cost, a 2014 Spectrem Group’s Millionaire Corner survey found.
Nearly six-in-ten Affluent respondents (59 percent) rank quality of education as the most important college selection factor, followed by the reputation of the institution. Cost ranks third.
Nearly four-in-ten consider the degree an institution offers when choosing a college for their child. This will probably increase. The elite colleges at the top of PayScale’s ROI rankings each emphasize technology and engineering, two of the STEM industries that promise the most lucrative majors, according to recent studies.
Rounding out the top 10 colleges with the best ROI are:
4. Colorado School of Mines ($831,000 20-year ROI at a four-year cost of $112,000)
5. Babson College ($812,800/$230,200)
6. Stanford University ($809,700/$233,300)
7. Massachusetts Institute of Technology ($798,500/$224,500)
8. Georgia Institute of Technology ($796,300/$86,700)
9. Princeton University ($795,700/$217,300)
10. Colorado School of Mines – Out of State ($771,000/$172,000)
No doubt, college is “worth it.” More than eight-in-10 (84 percent) affluent investors surveyed for Millionaire Corner believe a college education is necessary. But, cautions the PayScale study,
“The financial aspects of evaluating college return on investment cannot be ignored. And, some schools are simply doing a better job of setting their alumni up for success in the job market. Whether you're planning to study computer science or psychology, earning potential in your chosen field, along with the cost of attendance for the schools you're considering, should be part of the equation when whittling down your list of best return on investment colleges.”
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.