An Unconventional Guide to Paying for College

New College Rankings Measure Graduates Ability to Earn Top Salaries

Why did you choose the college that you graduated from?

Did you look at the Princeton Review and make your decision based on which college had the best dorms, the best food, or the highest female to male ratio? If you did, you can freely admit it because you are not alone. The majority of college students put serious stock in these factors, as well as which majors are offered, classroom size, and student to faculty ratio.

A dozen college ranking systems have sprouted up in recent years and they look at an avalanche of data when evaluating colleges. Among all of these ranking systems however, there seems to be one piece of foundational data that is missing: Return on investment!

The new “Payback” survey by SmartMoney creates a payback ratio which is based on the average cost of 4 years of tuition, and the average salary of recent graduates (those graduating within the last 2 years), and mid-career alums (those out for 15 years). The higher the ratio between tuition sticker price and actual salaries, the better ranking the college received.

This ranking system gets at the heart of what Money for College Project is all about. The goal of attending college is to prepare yourself with an education and a degree that will benefit you financially in the future. You also need to manage your costs while in college and maximize your future earning potential. The “Payback” survey gives us a great reference tool to see which colleges actually succeed at preparing their graduates to make money in the real world without being saddled with enormous amounts of debt.

Rank
School Type
School
Payback Ratio
Starting Tuition & Fees (4 yrs., class of 2009)
Median Pay (recent graduate)
Starting Tuition & Fees (4yrs., class of 1996)
Median Pay (mid-career graduate)
1
Public
Georgia Institute of Technology
221
$87,810
$57,300
$27,867
$105,000
2
Public
University of Texas, Austin
194
$91,596
$49,100
$26,115
$87,500
3
Public
University of Florida
191
$73,476
$45,200
$26,221
$84,300
4
Public
University of Georgia
186
$77,957
$42,100
$24,676
$78,400
5
Public
University of Illinois
184
$91,382
$51,500
$33,808
$96,500
6
Public
Clemson University
160
$85,362
$47,500
$31,708
$83,800
7
Public
Purdue University
152
$86,538
$50,700
$36,730
$88,000
8
Public
Colorado School of Mines
149
$90,334
$61,600
$49,296
$113,000
9
Public
Miami University (Ohio)
146
$93,195
$45,800
$37,606
$91,400
10
Public
University of California, Berkeley
146
$104,815
$53,100
$45,304
$109,000
11
Public
Indiana University
128
$87,065
$43,000
$38,824
$79,800
12
Public
Pennsylvania State University
126
$93,108
$48,600
$41,848
$83,900
13
Public
University of Rhode Island
123
$89,164
$45,200
$44,244
$86,200
14
Public
University Connecticut
121
$88,824
$49,500
$47,128
$87,700
15
Public
Michigan State University
119
$90,372
$44,200
$42,639
$81,000
16
Public
University of Virginia
117
$107,395
$50,500
$50,140
$93,900
17
Public
Univeristy of Colorado,
114
$97,918
$46,200
$50,510
$91,600
18
Public
College of William & Mary
111
$103,799
$46,900
$51,926
$91,700
19
Ivy League
Princeton University
102
$131,740
$58,900
$77,550
$123,000
20
Public
University of New Hampshire
101
$93,615
$44,900
$49,601
$76,200
21
Ivy League
Dartmouth College
100
$137,364
$54,100
$76,269
$123,000
22
Ivy League
Harvard University
99
$136,977
$57,300
$77,104
$121,000
23
Private
Carnegie-Mellon University
99
$143,540
$62,400
$69,860
$108,000
24
Private
Bucknell University
99
$146,576
$55,800
$72,420
$115,000
25
Ivy League
University of Pennsylvania
97
$139,962
$59,600
$73,430
$111,000
26
Private
Colgate University
95
$145,340
$48,700
$76,340
$119,000
27
Private
University of Richmond
93
$147,860
$48,500
$56,160
$86,300
28
Ivy League
Cornell University
92
$135,733
$57,500
$74,634
$106,000
29
Public
University of Michigan
91
$121,010
$50,600
$64,392
$90,200
30
Ivy League
Yale University
91
$134,320
$52,600
$76,970
$110,000
31
Public
University of Vermont
88
$108,862
$44,700
$62,673
$83,800
32
Ivy League
Brown University
87
$141,654
$49,400
$78,027
$109,000
33
Private
Williams College
86
$138,770
$49,900
$77,195
$106,000
34
Ivy League
Columbia University
86
$144,961
$54,300
$74,268
$99,700
35
Private
Dickinson College
84
$139,942
$45,900
$73,110
$99,100
36
Private
Carleton College
84
$141,109
$42,300
$75,357
$105,000
37
Private
Bowdoin College
84
$142,190
$45,300
$75,565
$103,000
38
Private
George Washington University
83
$145,600
$48,500
$70,270
$93,500
39
Private
Hobart and William Smith Colleges
79
$143,003
$42,200
$75,453
$97,300
40
Private
Tufts University
78
$142,891
$49,900
$78,903
$96,400
41
Private
Wesleyan University (Conn.)
78
$143,474
$46,700
$77,190
$96,100
42
Private
Trinity College
77
$144,354
$46,500
$74,070
$90,600
43
Private
Tulane University
76
$143,516
$45,300
$76,894
$92,200
44
Private
Gettysburg College
73
$140,060
$43,200
$77,408
$90,100
45
Private
Vassar College
70
$148,155
$43,000
$75,881
$83,200
46
Private
Reed College
69
$141,730
$38,400
$78,310
$86,100
47
Private
Oberlin College
67
$141,712
$40,500
$77,202
$80,800
48
Private
Hamilton College
65
$143,790
$45,600
$76,700
$75,500
49
Private
*Franklin & Marshall College
61
$142,090
$47,500
$92,315
$82,500
50
Private
Sarah Lawrence College
60
$148,570
$38,600
$76,626
$72,100

No Ivy Leagues at the Top?

I think it is really interesting to note that the first Ivy League college we see is Princeton University, and it comes in at No. 19 on the list. On this scale, the high cost of an Ivy League tuition does not actually give as high a return on investment within the first 15 years in the working force, as 18 other colleges. Very interesting. I would imagine that if we extended the time horizon out to 25 or 30 years, that many Ivy League colleges would jump up the list, but in the relatively short term, the Ivy Leagues are not the winners here.

I also do not see any medical schools listen here. Granted, the survey does not list any individual majors in their list, but we can assume that most medical schools and their exorbitant tuition and fees, did not make the cut.

Not a True Representation

While reading through the data, and Smart Money’s creation of their ranking system, it becomes quickly apparent that their data is a little skewed. Fortunately, in our case, the data is skewed in our favor. The average cost of tuition used in the survey was out of state tuition sticker price. This means that if you paid in-state tuition, or if you received ANY financial aid then your earnings ratio will be a lot higher.

Can you figure out your own payback ratio?

All you need is your cost of tuition for your 4 year education, and your current salary. Divide your current salary by your cost of tuition, add two zeros, and you have your score. My score is 800.

I’m not rolling in the big bucks, but I was fortunate enough to escape college with virtually no debt, and having financial aid pay for all of my costs. Once financial aid is factored in, you can begin to see the true weight of this ratio. It can be very powerful!

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6 Comments

  1. Glad to see our to State Flagship universities in the top 10, Ga Tech, and UGA, (go dawgs!)

    I think if more people spend the time studying the payback costs of their education, our country wouldn’t be awash in student debt! Good job!
    Dr Dean recently posted..Cloned Banks: Why That’s Not A Good Idea!My Profile

  2. First, you need to remember that most students who come from the middle class or lower income wise don’t pay a penny of tuition at the Ivy Leagues- making that a very different ratio, regardless of what they reportedly charge.
    The other thing skewing this data is that, as far as I can tell, it is only looking at undergrad. I also would be at a ratio of roughly 800- I went to my state school, where in state 4 years of tuition was just over 10k total (should have been class of 98). However, there is no way I’d be making my current salary if I hadn’t then gone on to grad school for an MBA.
    Combining both, I’m still at a 160 (so it’s like I went to Clemson right?), but trying to claim my undergraduate education is what got me my current salary is not exactly honest.

  3. I picked the college that I did because it was in-state and was all I could afford. However, it was is a really, really good school (#7 on your list, Univ of Colorado) and I learned a lot there and loved it!
    Jeff @ Sustainable life blog recently posted..Food in a Split HouseholdMy Profile

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