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How to Maximize the ROI of a College Education

This article was written based on the information and opinions presented by Vinay Bhaskara in a CollegeVine livestream. You can watch the full livestream for more info.


There are a lot of factors to consider when choosing a college. While characteristics like location, campus life, and extracurriculars are often on the top of the mind of college-bound high schoolers, another important feature to think about is return on investment—especially considering the cost of a college education.


What’s Covered:




Is College Necessary for a Successful Future?


The ever-rising expense of college leads many students to ask the question: is college necessary for a successful future? College graduates—and even those with some college—earn more than non-graduates, which makes college a good return on investment, or ROI. However, if you are still wondering “Why is college worth it?” those holding a bachelor’s degree will earn almost twice as much in lifetime earnings as a person with a high school diploma.


Just how well a college education will return on investment varies greatly depending on the choices a student makes about everything from where to attend college to what major to pursue to how they spend their time in school.


Understanding Cost of Attendance


Before exploring how to maximize the return on investment of a college education, it’s important to understand the cost of college. The published price of a school provides a good ballpark idea of the expense of an institution, but the more important figure is what college will actually cost you.


The actual cost of college is more complex than the number printed in the brochure and will differ due to a number of factors, such as family income, which influences financial aid and scholarships. Net cost—the published price minus grants, scholarships, tuition waivers, and gift aid—provides a clearer picture of the actual expense of college.


The majority of colleges have a net price calculator on their websites, and CollegeVine’s free Financial Aid Calculator provides a centralized place to enter your information and can estimate the cost of hundreds of colleges and universities across the country.




Another good method to find out how much college will cost is to see if a school uses the Free Application for Federal Student Aid (FAFSA) or College Scholarship Service (CSS) Profile to determine financial aid. In general, colleges that use the CSS profile are less generous in awarding financial aid.


The CSS profile is used by over 200 private colleges and takes into account a variety of economic aspects—like income, assets, and financial obligations—unlike the FAFSA, which primarily uses expected family contribution to determine aid eligibility.


Maximize ROI of a College Education


Students and families focused on ROI tend to target ways to control the expense of college, such as how to cut costs and pay less for school. These are valid concerns and good objectives to have. However, they overlook a significant part of the equation, which is maximizing the return and making the most out of your education.


What you get out of school plays a significant role in ROI for the majority of college students. This makes fit an extremely important consideration when choosing a school. For example, a student who thrives in small classrooms with personal interaction with their teachers and a tight-knit community is likely to take away more from a small private college than a large public university and ultimately deliver a stronger ROI.


Which College Majors Pay Off


Different careers have different pay rates; consequently, the major you pursue will greatly influence the financial benefits of going to college. For example, majors like engineering, computer science, and finance generally lead to high-paying careers and an excellent return on investment, while majors like social work, criminal justice, and psychology commonly lead to less lucrative careers and can actually have a negative ROI. Below is a look at the ROI of some popular programs.


  • Medicine: The ROI of becoming a doctor is huge, of course. There is a very positive financial outcome for students who are able to graduate from an undergraduate program (usually in pre-med or a science major), get into medical school, graduate medical school, and pass a licensing exam.
  • Astrophysics: Like other science majors, astrophysics delivers a strong ROI. However, astrophysics majors have fewer career opportunities than those with more general science majors—like chemistry, for example—which limits their career options and can result in a comparatively lower ROI.
  • Neuroscience: Similar to astrophysics, a neuroscience major has a good ROI, however, it’s not as strong as other, broader STEM majors like physics or engineering.


Undergraduate majors are less important to students with plans to continue college after graduation, such as attending medical or law school. For these students, the priority is to build a really strong resume for their law or medical school application.


How Loans Impact the Cost of College


How a college handles loans can have a significant impact on the cost of college. Some colleges consider federal student loans a form of financial aid, while other schools do not consider student loans as part of their financial aid package.


A few schools in the U.S.—such as Harvard, Princeton, Yale, and Stanford—have established no-loan policies. No-loan colleges don’t include loans in their financial packages; rather, the difference between what college costs and what a student can afford to pay is reached with grants.


What are Less Expensive, Private or Public Colleges?


Which are less expensive, private or public colleges? It depends. It’s common for selective colleges to provide the best financial aid. All of the nation’s no-loan colleges are highly selective, top-ranked, and private, since they generally have the largest endowments and can afford to show more generosity. Public colleges typically have lower published prices but offer less financial aid, with the exception of Pell Grants which are provided by the federal government.


The Pros and Cons of In-State and Out-of-State Colleges


There are pros and cons to both in-state and out-of-state colleges. In-state colleges generally have a lower cost of admission than out-of-state schools, but less-selective out-of-state private colleges often offer more merit aid.


Location is also a factor. Some areas are simply expensive, such as schools in the Northeast. For example, the in-state cost of attending Rutgers University is about $30,000. It’s possible that a less-selective private school in the Midwest or Southeast could end up less expensive after financial aid.


How Can Reciprocity Programs Cut Down College Costs?


Reciprocity programs are found throughout the country—they enable students in neighboring states or from the same region to attend school out-of-state for in-state tuition. For example, Minnesota and Wisconsin have a reciprocity agreement that allows Wisconsin residents to attend Minnesota schools for in-state rates and vice versa.


The Impact of Family Income on Financial Aid


The amount of financial aid a student receives will depend on their family’s financial situation. In general, the less money a student’s family earns, the more money they’ll receive in financial aid.


Financial aid opportunities recede for students from families with more than $150,000 in household income and become pretty much nonexistent for students from families with more than $250,000 of household income. Similarly, there are limited financial aid opportunities for students from families with more than a half-million in liquid assets—checking accounts, savings accounts, investment accounts, etc.—and virtually none for those from families with a million dollars in assets.


Lowering the Expense of College with Merit Aid and Scholarships


Merit scholarships, which are typically awarded on the basis of academic, athletic, and artistic talent or achievement, are an excellent opportunity for students to lower the cost of college. The best merit scholarships are given to overqualified applicants—that is, students who have stronger grades, test scores, and extracurricular activities than other applicants to a school. Less-selective private colleges tend to offer the most merit aid, using it as a recruitment tool to attract top students to their school.


Minimizing Time in College to Improve ROI


The more time a student spends in college, the more it costs and the less time they have to earn money as a member of the workforce. AP exams are not only beneficial for getting into college, but for getting out of it as well. Many schools will award credit to students who earn certain scores on their AP exams. A large number of students admitted into top colleges have taken between 10 and 12 AP classes, which means they have a huge head start on their degree before ever setting foot on campus.


Make the Most of Your Time at College


The decisions you make in college can have a ripple effect on your career and the return on investment you get from your college education.


Choose the Right Major


As discussed above, the major you choose can have an enormous impact on your future earning potential. It behooves students to carefully consider their field of study and make pragmatic decisions. This doesn’t mean everyone needs to become an engineer, it just means it’s a good idea to make smart decisions within your area of interest.


For example, a student with an interest in visual arts is financially better off pursuing areas like visual design or user experience design, which have a heavy visual component and much stronger financial returns than an arts degree.

Take Advantage of Opportunities


Take advantage of all the unique opportunities provided by a college campus, such as career advising, internships, study abroad, and co-ops. Also, make sure to network with fellow students, professors, and alumni.


Become a Big Person on Campus


Unique opportunities—with companies and alumni—are often reserved for the strongest performing students on campus and help create pathways to careers and professional graduate programs after college. It’s sometimes more beneficial to be the top student at a less-selective school than it is to be in the middle of the pack at a top school.


What’s More Important: Prestige or Program?


In general, the more prestigious the school, the better the return on investment in it. However, the prestige of a college matters less for those pursuing higher-paying majors. For example, out-of-state computer science graduates at San Jose State University have a better return on investment than a psychology student at Harvard. For that matter, the ROI for computer science graduates at San Jose State University, BYU, Stevens Institute of Technology, and the University of Delaware is higher than the ROI of computer science graduates from the University of Pennsylvania, so make sure to do your research.


College Location and ROI


Location plays a big part in the return on investment in college and is a secret weapon when it comes to maximizing returns. For example, San Jose State University is a strong choice for computer science graduates thanks to its proximity to Silicon Valley—companies tend to hire local college graduates. In fact, San Jose State University has more graduates working at the top 100 Silicon Valley firms than any other college in the country.


How Outcomes Impact ROI


The more transparent a college is about the outcomes of their students, the more informed decisions you can make, and the better your odds of maximizing your ROI of a college education. Look at key metrics like graduation rates, transfer rates, and employment rates after graduation. Other things to consider are the school’s relationship with employers—are their co-ops and internships to help career build? How about alumni? Are past students active with the college and helping current students on their career pathway?


How Much Will College Cost?


The actual cost of each college can vary significantly for the same family, and you can’t trust the sticker price to tell you your personal cost of attendance. Curious what it will cost you to attend college? CollegeVine can help. Our free Financial Aid Calculator estimates the expense of attending school at hundreds of colleges across the country in just minutes.