PayScale App Helps You Decide If College Is Worth It
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Should you go to that highly ranked but super-expensive college? Would it be smarter to opt for the more affordable but less-well-known state school? How do you even begin to tell?
PayScale, a company that requests crowdsourced graduation and employment data, recently released an interactive feature that aims to answer that question.
The company looked at return on investment for around a thousand colleges grouped by categories that vary from “Research Universities” to “Sober Schools” and “Schools for Sports Fans.” As a general rule, the investment is the actual cost of attending college and the return is the additional expected future income stream received for being a college graduate.
But the online interactive lets viewers check boxes that break down return on investment by in-state vs. out-of-state tuition, public vs. private universities, between students who receive financial aid and those who do not, and by major.
Not everyone is looking for the same thing, and the report acknowledges that.
For instance, if you’re dead set on majoring in political science, Texas A&M has a high return on investment for both students paying in-state and out-of-state tuition.
If you want to go to college in California and are eligible for financial aid, Harvey Mudd College is a good bet for a high return on investment, regardless of major.
But if you decide that a school with a great sports culture is what you’re after, check out Stanford or Georgia Tech.
The tool is one of the only online features that isn’t just a static ranking of schools. And the fact that the company factors salary information into their analysis is relatively novel, too. That’s because salary info is hard to come by. Colleges don’t like to report it. The Obama administration wants to include it in the college ratings system it is developing and also tie federal financial aid to how good a school is at graduating students who find gainful employment after graduation. But that’s going to take congressional approval, which will not be easy to secure.
So how does PayScale get salary information?
The company does web surveys to gather employment data, which it sells to companies trying to identify competitive salaries. People report where they went to school, what they studied and what they earn, among other factors. Clearly, the reliance on self-reported data is far from perfect and sample size is an issue, but it’s a start in a field that is deplorably empty.
Here are a couple of the most interesting nuggets from the report:
There is still a positive return on investment, for now
– The average 20-year return on investment is 10.4 percent. As of a couple of months ago, 20-year Treasury bonds yielded an annual return of 3.4 percent. That means the average college graduate from one of the schools in the report will earn more in 20 years than someone who takes the tuition money and puts it into a 20-year bond and goes to work straight out of high school.
Consider engineering if money is a focus
– Almost all of the schools with the top 20-year net return on investment focus on engineering. The average for engineering schools is more than $620,000, three times the average for non-engineering schools.
Go state!
– By and large, state schools provide the best annual return on investment. Nineteen of the top 20 schools are public institutions.
We need to pay teachers more
– Education majors have the lowest return on investment, at negative $45,109. Computer scientists have the highest, at $671,081. Majors matter.
PayScale also has a series of infographics that dig into things like ethnicity and graduation rate, and gender and STEM degrees. Check out a couple of them below and find more on the Payscale website.
Emily DeRuy is a Washington, D.C.-based associate editor, covering education, reproductive rights, and inequality. A San Francisco native, she enjoys Giants baseball and misses Philz terribly.