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Whether you are going to college for the first time this fall or are a young professional coping with student loans, you may be coming to grips with the cost of higher education.

According to Bloomberg, the cost of tuition has exploded by 1,200 percent over the past thirty years. While your parents or grandparents could go to school and work part-time to pay the bills, that is not feasible for most people anymore.

However, that does not mean that a degree is not worth the investment. According to a Pew Research Center survey, the earning gap between workers with a bachelor’s degree and those with only a high school diploma is wider than ever.

The difference in median annual earnings is $17,500. Over time, that difference can add up significantly. In a study published by the Georgetown University Center on Education and the Workforce, researchers concluded that the difference in lifetime wages between high schools graduates and those with a college degree was over $1 million.

Factors affecting ROI

A college degree is an investment, and like all ventures, it is important to understand your college return on investment (ROI). There are three essential factors to consider when evaluating whether your degree and chosen college are worth the expense.

Net cost of attendance

The first thing you need to figure out is how much you will actually pay for school. There’s the published sticker price of attending a particular school — tuition, room and board, books, and other expenses — and there’s “net cost,” which is what college will actually cost after you’ve claimed all of the federal, state, and institutional grant aid available to families in your income bracket.

Most students don’t pay “full freight,” so it’s important to find the net cost of each school you’re considering. College Abacus is a useful tool that can give you an estimate of how much a school usually costs, based on scholarship offerings and other aid.

Potential debt

After determining the net cost of attendance over four years, review what your actual debt load will be. Consider your full financial aid package, including scholarships, grants and loans. In some cases, scholarships can help you avoid taking out so much in student loan debt. In others, the scholarships will barely cover books and supplies, and you’ll have to borrow to attend school. You can use a student loan calculator to see how much a loan will truly cost you over its lifetime.

Also, evaluate whether or not you will be able to work while going to school. In some programs, many students can hold jobs. In others, the rigorous curriculum makes it impossible. Whether or not you can have a job can significantly affect your debt burden.

Earnings potential

While signing a promissory note can seem like nothing when you are a freshman, keep in mind that you will be paying back those loans for a decade or more. Evaluate your chosen career path’s entry-level salary.

According to Edvisors, a site that provides information on how to pay for college, a good rule of thumb is to limit total borrowing to no more than one year’s salary right out of school. Setting that limit can keep you from getting over-burdened and prevent you from defaulting on your loan.

There are exceptions to the rule. For career paths where salary increases can be significant, such as in technology or law, taking on more debt can be reasonable. For instance, a Michigan State University survey found that the average entry-level salary for an engineer is $56,000. At the other end, social work majors are expected to make approximately $36,000 after graduation.

Engineering students can afford to take out more debt in student loans, while other majors may need to come up with alternatives, such as attending community college first and then transferring to a four-year school, to minimize their debt burden.

Tools to evaluate your investment

While college guides and rankings can be a good place to start the college search process, there are a growing number of tools that can help evaluate the ROI of colleges and degrees you’re interested in.

College Scorecard

Launched by the White House in 2015, College Scorecard provides information on how much money a school’s graduates earn, the student loan debt average students carry and how many students can keep their loans in good standing.

While these are valuable insights, one of the biggest drawbacks is that it does not provide graduates’ earnings by major — all majors are lumped together in one statistic for average income. For a school that produces many science, technology, engineering and math (STEM) graduates, that can skew the results. Those earning degrees in the humanities or social sciences may earn substantially less than the average for the school as a whole.

College Scorecard also focuses on traditional, full-time students, so non-traditional students, such as adult learners, may find the information inaccurate.

PayScale

PayScale is a popular tool that lists schools by their salary potential. PayScale’s report is compiled by researching over 1,000 schools and determining the average earnings of alumni. Data is collected from self-reported surveys. PayScale is one of the few sites that includes median mid-career data, giving you an idea of what to expect as your career progresses.

While PayScale can be a useful tool during your research, it does have limitations. For instance, because it relies on self-reported data, there is no guarantee of accuracy in the results. It also oversamples young professionals fresh out of school, who are more likely to use salary calculators. This can skew the results, because older, higher-earning workers are underrepresented.

Finally, PayScale does not distinguish between graduate degrees and undergraduate degrees. If those with a master’s degree share their salaries, that can bump up the median salary for their alma mater.

College Reality Check

College Reality Check is run by the Chronicle of Higher Education and is supported by the Bill & Melinda Gates Foundation. It aims to make college more transparent to students and parents, sharing overlooked factors like colleges’ net prices, graduation rates, how much graduates can earn and how much you will have to pay in monthly student loan debt.

The site compares data from a much larger range than other sites, surveying over 3,500 institutions. It is also unique in that it analyzes data by gender and ethnicity, allowing you to see if certain groups have a harder time at that school or not. One issue with the site is that salary data is pulled from PayScale, so it is also dependent on self-reported data from primarily younger professionals.

College Measures

According to the National Center for Education Statistics, approximately 60 percent of students who attend four-year schools graduate within six years. For minority students, that rate is even lower. For those who drop out, they miss out on the benefit of a degree but still bear the weight of significant student loan debt.

College Measures is a website focused on making information regarding graduation rates and cost more accessible. You can search for information relative to your area or select a specific school. A joint venture of the American Institute for Research and Optimity Advisors LLC, College Measures provides data on first-year retention rates, graduation rates, overall cost and what percentage of graduates default on their student loans.

While College Measures presents comprehensive data, it does have some limitations. The earnings data captures salaries 18 months after graduation, which is not representative of actual earnings, as mid-career salaries can be substantially more. The data also does not take into account graduates who moved out of state for employment or graduates who went on to graduate school, skewing the accuracy of the employment information.

College Measures powers two sites that help high school students research colleges and careers at the state level — Launch My Career Colorado, and My Future TX.

Launch My Career Colorado

LaunchMyCareerColorado.org is aimed at helping students and families determine future salaries based on their chosen university, major and industry. It lists high-demand areas of employment in the student’s area and a lifestyle calculator, allowing students to see how long it would take in their career path to achieve their financial goals.

However, one issue higher education officials have raised about the site is that it does not include data on graduates who have taken jobs in other states. For instance, if technology graduates left the state to take lucrative positions in California for Google or Facebook, their incomes would not be included in the data for technology majors, making the information incomplete.

JA Build Your Future app

First rolled out in 2013, the JA Build Your Future app from Junior Achievement USA was updated in February, 2016 to include more careers profiles and fix a glitch that caused some early reviewers to pan the app.

JA Build Your Future lets you explore levels of education required for more than 100 careers and compare the cost of a degree to potential income. The app won’t crunch numbers for individual schools, but you can specify whether you plan to attend a public or private college or university, and whether you’ll be an in-state or out-of-state student. After adjusting the contribution you expect you and your parents expect to make and the amount of student loans you may need, the app will provide a return on investment (ROI) score between 1 and 5, with 5 indicating you should have no problem repaying the debt you’d have to take on, and 1 meaning it will be difficult to pay off.

Junior Achievement Build Your Future app

The JA Build Your Future app predicts an excellent return on investment for students who get help from their parents and work part time while pursuing a bachelor’s degree in accounting from a public college in their home state. Source: Junior Achievement, PricewaterhouseCoopers.

The app draws salary and education data from two main sources — the U.S. Bureau of Labor Statistics and PricewaterhouseCoopers’ financial literacy curriculum — supplemented with content and review from Junior Achievement. The app serves up numbers that are based on national averages and other available data that may not reflect all costs and requirements, but you can make manual revisions to any inputs you think you have better data for.

One issue with the original version of the app that led some reviewers to pan it was that after reading terms and conditions, some users didn’t realize they needed to scroll down and hit “accept” to get into the app, said Junior Achievement’s Ed Grocholski. The February update corrected that problem, added additional careers based on user feedback, and provided more current data about college costs and incomes related to specific jobs and career paths.

“We may not have all careers everyone wants but have endeavored to include the most sought after,” Grocholski said.

TG’s ‘Major Choices’ calculator

Austin, Texas-based nonprofit TG’s “Major Choices” calculator lets users get an idea how much student loan debt they’ll take on to attend public colleges or for-profit institutions in Texas, and how their choice of major may affect their ability to repay it.

The app lets users compare outcomes of obtaining a degree in the same major from different schools, generating estimated total student loan debt and first-year monthly income tailored to the school and degree. The app calculates the percentage of your monthly income that would go toward your student loan repayment, color-coding it like a traffic signal — less than 10 percent is green, 10 to 15 percent yellow, and more than 15 percent red.

TG Major Choices calculator

TG’s “Major Choices” calculator shows that because of their greater earnings power, students obtaining a master’s degree in accounting from Texas State University will take on more student loan debt than those who obtain a bachelor’s degree in the same field, but pay a smaller percentage of their monthly salary to pay it off. Source: TG / Adventures in Education.  

According to TG, “Research suggests graduates with monthly student loan payments that make up 10 percent or less of their monthly income are the least likely to encounter financial challenges during loan repayment,” while those paying more than 15 percent may run into difficulties.

Removing emotions from the equation

Your college education is one of the most expensive investments you will make in your lifetime. Your return on investment for your education comes down to evaluating what you will pay out of pocket versus what your earning potential will ultimately be. Taking emotions out of the equation and focusing on the data and research can help you make a more practical and thoughtful decision, limiting how much student loan debt you need to take on.

Kat Tretina is a freelance writer in Orlando, Florida. She double majored in English and communications at Elizabethtown College, before going on to earn a Master’s in communications from West Chester University.

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