A college education can be a great investment. College graduates earn 66% more than workers with just a high school diploma. And over their lifetime, the average college graduate earns around $1 million more than workers who didn’t receive a postsecondary education.
But that doesn’t mean it’s a good investment for everyone. According to the National Center for Education Statistics, the average cost of four years of university is $104,500 ($26,120 per year). Let’s put that figure in context. If a 25-year old invested $100,000 in a retirement fund and never made another contribution, she would have $1,497,400 by the time she retired at 65. This is assuming a mediocre 7% rate of return. The historic 30-year return of the S&P 500 has been around 12%.
So, before you pull out your checkbook, you should make sure that the investment will yield a salary worthy of that sacrifice.
How to determine the return on investment
The first step is to find an area of study you enjoy that will provide a sufficient return on your investment. Otherwise, you could find yourself trapped under decades of student debt. Second, you need to choose a college that has a good record of preparing students for the work market.
Fortunately for you, we have crunched the numbers and worked out which colleges have the best record at providing value for your educational dollars.
We created two “Top 50 Colleges by Return on Investment.” The first one deducts financial aid and the second uses the full-cost of attending college.
How were these lists created?
We analyzed top colleges and ranked them according to their return on investment (ROI). We did this by comparing the cost of attending a school with the median salary of graduates. Note that there are several ways to calculate the cost of attending a school. There are also more than one way to determine the salary of graduates. To account for these differences we ranked our list of colleges based on different data sets and methods of calculating return on investment.
Top 50 colleges ranked by ROI with financial aid
The U.S. Department of Education College Scorecard is a free resource that assesses colleges by comparing their cost, graduation rate, and salary after attending. All three of these metrics are important on their own. But when you factor in all three, you can find the school with the best ROI in the country.
Average tuition cost
In this scorecard, the U.S. Department of Education based the average tuition cost on the net price that federal student aid recipients paid. They also subtracted scholarships, grants, and other forms of student aid from the retail tuition cost. For public schools, these numbers are based on in-state tuition.
Median alumni salary
The College Scorecard ranks salaries based on the median earnings of former students who received federal financial aid. However, note that these are not starting salaries. Rather, they are what former students earned 10 years after graduating.
Top 50 colleges with the highest ROI (with financial aid)
This chart highlights the colleges with the highest ROI, as determined by comparing the average salary ten years after graduation vs. the average cost of annual tuition. The higher the number in the ROI column, the greater the return. Note that we first filtered the raw data by the colleges with the top 250 salaries. This was done to weed out colleges that were practically free for students with federal aid but had median salaries at or below minimum wage. We then removed colleges that did not provide data on the average cost for tuition. Finally, we divided the median salary by the average tuition fee. Note that this list includes the various sources of financial aid available to students.
Remember this list only includes institutions that provided tuition, costs, and median salary after 10 years to the Department of Education. Institutions that did not provide this information, were not included. We only included the cost of one year, so the ROI is skewered for institutions that regularly require students to study for 5 years instead of 4 years. Also, note these lists only include baccalaureate degrees, not masters or PhDs.
|Rank||Colleges with the Highest ROI||Average Cost of 1 Year||Median Salary after 10 years||ROI||City||State|
|1||United States Merchant Marine Academy||$6,758||$88,100||13.0||Kings Point||NY|
|5||Georgia Institute of Technology-Main Campus||$13,291||$79,100||6.0||Atlanta||GA|
|6||California State University Maritime Academy||$16,416||$82,900||5.0||Vallejo||CA|
|7||Massachusetts Institute of Technology||$20,771||$104,700||5.0||Cambridge||MA|
|8||Missouri University of Science and Technology||$14,473||$71,200||4.9||Rolla||MO|
|9||Massachusetts Maritime Academy||$18,027||$86,600||4.8||Buzzards Bay||MA|
|10||SUNY Maritime College||$18,413||$82,800||4.5||Throggs Neck||NY|
|11||Yale University||$18,627||$83,200||4.5||New Haven||CT|
|12||Albany College of Pharmacy and Health Sciences||$29,761||$124,700||4.2||Albany||NY|
|13||St. Louis College of Pharmacy||$30,274||$124,100||4.1||Saint Louis||MO|
|14||Maine Maritime Academy||$23,460||$95,600||4.1||Castine||ME|
|15||University of Pennsylvania||$24,242||$85,900||3.5||Philadelphia||PA|
|16||California Institute of Technology||$24,245||$85,900||3.5||Pasadena||CA|
|17||New Jersey Institute of Technology||$19,409||$68,500||3.5||Newark||NJ|
|19||Columbia University in the City of New York||$24,231||$83,300||3.4||New York||NY|
|20||Milwaukee School of Engineering||$21,328||$71,300||3.3||Milwaukee||WI|
|21||Colorado School of Mines||$25,710||$84,900||3.3||Golden||CO|
|22||Illinois Institute of Technology||$22,098||$69,100||3.1||Chicago||IL|
|24||Washington and Lee University||$24,761||$76,100||3.1||Lexington||VA|
|26||St Paul’s School of Nursing-Staten Island||$27,891||$84,400||3.0||Staten Island||NY|
|27||University of the Sciences||$31,454||$91,600||2.9||Philadelphia||PA|
|29||Neumont College of Computer Science||$25,375||$69,400||2.7||Salt Lake City||UT|
|30||University of Notre Dame||$28,768||$78,400||2.7||Notre Dame||IN|
|31||Claremont McKenna College||$26,933||$72,900||2.7||Claremont||CA|
|32||Babson College||$35,540||$96,100||2.7||Babson Park||MA|
|33||Carnegie Mellon University||$31,102||$83,600||2.7||Pittsburgh||PA|
|34||University of Chicago||$25,455||$68,100||2.7||Chicago||IL|
|35||The Creative Circus||$29,439||$77,200||2.6||Atlanta||GA|
|36||Harvey Mudd College||$34,464||$88,800||2.6||Claremont||CA|
|39||University of the Pacific||$29,171||$71,700||2.5||Stockton||CA|
|40||Washington University in St Louis||$28,540||$70,100||2.5||Saint Louis||MO|
|41||University of Southern California||$30,232||$74,000||2.4||Los Angeles||CA|
|43||Stevens Institute of Technology||$36,620||$89,200||2.4||Hoboken||NJ|
|47||Rensselaer Polytechnic Institute||$34,839||$82,000||2.4||Troy||NY|
|49||St Paul’s School of Nursing-Queens||$35,739||$81,300||2.3||Rego Park||NY|
|50||DigiPen Institute of Technology||$35,538||$80,200||2.3||Redmond||WA|
What actionable insights can we get from this list of the top 50 colleges by ROI?
Not surprisingly, this list includes most of the prestigious colleges you would expect to see. All the Ivy League members (Columbia, Cornell, Dartmouth, Harvard, Penn, Princeton, and Yale) except Brown made it to the top 50. University of Chicago, MIT, and Stanford University are also there.
What is more noteworthy is that big names in education are missing from the list but five maritime academies are in the top 15. Let that sink in. There are only seven academies that offer maritime degrees and five of them are in the top 15. In fact, the #1 university by return on investment is the United States Merchant Marine Academy, the only federal maritime academy.
Top performers by college types
Colleges that specialize in technology, nursing, and pharmacy also performed particularly well. A common thread among the universities with the best ROI is they focus on training their graduates for a specific career or area of study.
In fact, the top three colleges by median salary after 10 years are all pharmacy schools: Albany College of Pharmacy and Health Sciences ($124,700), St. Louis College of Pharmacy ($124,100), and MCPHS University ($116,000).
This summarizes well when higher education is a good investment from a financial standpoint. If you have a specific career or job in sight and it comes with a juicy salary, then investing in a four-year education can be a great investment. If you are attending university just to get a taste of the college lifestyle but have no clear path to a job, you could be setting yourself up for financial failure.
Top Colleges with the highest ROI (without financial aid)
For this list, we used the Integrated Postsecondary Education Data System: an annual survey conducted by the U.S Department of Education and PayScale’s salary data. Instead of looking at the median salary after 10 years, we consider the median income for the 20 years after graduating and compare it to the median 24-year income for high school graduates.
This list does not include the financial aid most colleges offer students. We are also looking at on-campus cost of attending college.
|Rank||Name of School||20 Year Net ROI||Total Cost||Graduation Rate||Average Debt|
|1||United States Merchant Marine Academy (Service Academy)||$1,094,000||$34,900||76%||$20,000|
|2||United States Military Academy (Service Academy)||$1,041,000||$0||86%||N/A|
|3||Massachusetts Institute of Technology (Private)||$1,015,000||$249,000||93%||$30,200|
|4||United States Naval Academy (Service Academy)||$1,004,000||$0||86%||N/A|
|5||SUNY Maritime College (In-State)||$1,003,000||$95,300||57%||$29,600|
|6||Harvey Mudd College (Private)||$978,000||$272,000||93%||$25,500|
|7||SUNY Maritime College (Out-of-State)||$964,000||$134,000||57%||$29,600|
|8||Colorado School of Mines (In-State)||$909,000||$126,000||77%||$26,700|
|9||United States Air Force Academy (Service Academy)||$905,000||$0||83%||N/A|
|10||California Institute of Technology (Private)||$887,000||$250,000||94%||$30,900|
|11||Albany College of Pharmacy and Health Sciences (Private)||$870,000||$178,000||71%||$54,500|
|12||Georgia Institute of Technology-Main Campus (In-State)||$856,000||$101,000||86%||$33,500|
|13||Colorado School of Mines (Out-of-State)||$840,000||$195,000||77%||$26,700|
|14||The California Maritime Academy (In-State)||$837,000||$87,700||62%||$28,600|
|15||Stevens Institute of Technology (Private)||$832,000||$250,000||83%||$26,700|
|19 (tie)||Babson College(Private)||$793,000||$254,000||91%||$32,100|
|19 (tie)||The California Maritime Academy (Out-of-State)||$793,000||$132,000||62%||$28,600|
|21||Massachusetts Maritime Academy(In-State)||$783,000||$92,200||76%||$30,700|
|22 (tie)||Georgia Institute of Technology-Main Campus (Out-of-State)||$777,000||$180,000||86%||$33,500|
|22 (tie)||Worcester Polytechnic Institute (Private)||$777,000||$242,000||86%||$44,400|
|24||Kettering University (Private)||$766,000||$215,000||53%||$44,200|
|25||Harvard University (Private)||$760,000||$254,000||97%||$27,400|
|26||University of California-Berkeley (In-State)||$759,000||$139,000||92%||$23,900|
|27||Missouri University of Science and Technology (In-State)||$753,000||$87,300||64%||$27,000|
|28||Rose-Hulman Institute of Technology(Private)||$751,000||$239,000||82%||$45,800|
|29||University of Pennsylvania (Private)||$739,000||$262,000||95%||$28,600|
|30||Massachusetts Maritime Academy (Out-of-State)||$721,000||$155,000||76%||$30,700|
|31||Maine Maritime Academy (In-State)||$718,000||$103,000||62%||$70,200|
|32||United States Coast Guard Academy (Service Academy)||$714,000||$0||87%||N/A|
|33||Dartmouth College (Private)||$707,000||$265,000||97%||$24,700|
|34||Carnegie Mellon University (Private)||$705,000||$260,000||90%||$32,000|
|35||New Jersey Institute of Technology (In-State)||$704,000||$135,000||61%||$34,400|
|36||Rensselaer Polytechnic Institute (Private)||$703,000||$260,000||83%||$40,400|
|37||California Polytechnic State University-San Luis Obispo (In-State)||$699,000||$100,000||80%||$22,500|
|38||New Mexico Institute of Mining and Technology (In-State)||$692,000||$79,100||49%||$19,400|
|39||Missouri University of Science and Technology (Out-of-State)||$691,000||$149,000||64%||$27,000|
|40||Yale University (Private)||$689,000||$261,000||98%||$21,500|
|41||Virginia Military Institute (In-State)||$680,000||$111,000||78%||$34,400|
|42||Lehigh University (Private)||$679,000||$240,000||89%||$37,400|
|43||Maine Maritime Academy (Out-of-State)||$670,000||$152,000||62%||$70,200|
|44||University of California-Berkeley (Out-of-State)||$662,000||$236,000||92%||$23,900|
|45||California Polytechnic State University-San Luis Obispo (Out-of-State)||$654,000||$145,000||80%||$22,500|
|46||Columbia University in the City of New York (Private)||$653,000||$272,000||94%||$35,900|
|47||Capitol Technology University (Private)||$651,000||$144,000||51%||$32,000|
|48||Rice University (Private)||$650,000||$229,000||93%||$29,500|
|49 (tie)||Michigan Technological University (In-State)||$649,000||$109,000||67%||$30,700|
|49 (tie)||New Jersey Institute of Technology (Out-of-State)||$649,000||$190,000||61%||$34,400|
|51||Cornell University (Private)||$646,000||$258,000||94%||$32,100|
What do we learn from this list of the top 50 colleges by ROI?
If you remove financial aid from the picture, service academies and colleges that specialize in engineering, and health services show an even higher return on investment. Note that four out of the top five colleges are service academies. SUNY Maritime College, #5, is not a full service academy because it does accept civilian students but it mainly caters to U.S. Coast Guard Merchant Marine Regiment.
The key takeback from both of these lists is that if your focus is a financial return on your investment you should choose a college that provides a clear path to a career in technology or health sciences.
How to reduce the cost of college
The College Board found that college tuition is on the rise, growing 2% to 3% faster than inflation. Although you can’t stop inflation, there are ways that you can reduce the cost of your tuition. These include:
- Scholarships and grants.
- Work-study programs.
- Attend an in-state public college.
- Transfer from a community college.
Let’s dig deeper into each of these options.
Scholarships and grants
Private and public financial aid make college more affordable. Many schools have endowments that assist with tuition to ensure that underprivileged students can afford to attend. Additionally, you can find scholarships from companies, endowments, and individuals. These are often targeted to employees and their families, people from specific backgrounds, or those pursuing a certain major.
The biggest advantage of scholarships and grants is that you don’t have to repay them. Complete an online FAFSA (Free Application for Federal Student Aid) to find out how much you qualify for in scholarships and grants.
Scholarships are a valuable resource for financing college expenses. About a third of college costs are covered by scholarships and grants. If you are going to college and you want to use your education to help people reach their financial goals, check out SuperMoney’s Financial Literacy scholarship program. It awards $2,500 a year to a student who wants to help Americans improve their financial wellness through continued education.
Work-study programs are available to part- and full-time students pursuing their undergraduate and graduate degrees. They let you earn money part-time to pay for college. Unlike a typical part-time job, work-study jobs focus on community service and your particular course of study.
Alternatively, some companies will pay for some or all of a student’s tuition in exchange for part-time work. These companies invest in education in the hopes that the students they sponsor will boost their performance in the long run. Note that if you enter into such an arrangement, the company sponsoring your education may require you to work for them for a set timeframe after graduating.
Attend an in-state public college
Private universities charge the same tuition no matter where you come from. However, public colleges cost more for out-of-state students. In other words, if you live in a state that runs the public university, you’ll pay less than your out-of-state peers.
To save money on your college education, consider attending a public college in your home state.
Transfer from a community college
Another option is to attend community college for your general education classes. By taking these basic classes at a community college, you’ll save thousands off the cost to attend a 4-year university.
Once you graduate with your Associates in Arts (AA) degree, you can transfer to a private university to complete your degree.
How to find the right college
When picking a college, don’t focus solely on the stated tuition cost. Speak with your guidance counselor to understand what financial aid is available to you. Don’t assume that a high-cost university is out of reach — it may have programs that could lower the tuition cost to something you can afford.
As you can see from the Scoreboard, the colleges with the highest ROI include both household names and relative unknowns. That means you don’t have to go to an Ivy League to get a good return on your investment.
Also, before you choose your major, do research to find out what salary you can expect. Then compare that salary against what your education will cost you.
And if you’re applying for student loans, make sure that your future salary will be enough to cover your bills. If federal student loans aren’t enough to cover your tuition, consider taking out a private student loan to fill the gap.
Andrew is the managing editor for SuperMoney and a certified personal finance counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.