When Forbes releases its annual list of best colleges this summer, it will use a methodology that includes more than a dozen measurements, from student evaluations to retention rates to level of student indebtedness. Just 15% of the ranking comes from alumni compensation reported on the salary listing website Payscale.com.
But what if you’re concerned mainly with the money you will earn, compared to the amount you are shelling out to pay for your degree, particularly now that the four-year tab for most private colleges exceeds $200,000? Payscale recently released a list of more than 1,500 schools measured purely by the 30-year return on investment (ROI) for Bachelor’s degrees. The site also tracks typical starting salaries for graduates of these schools.
The three schools at the top of the list all emphasize technology and engineering. No. 1: Harvey Mudd College, a four-year private liberal arts college with 775 students in Claremont, Calif., that is part of the five-college consortium that includes Pomona and Claremont-McKenna. According to Payscale, Harvey Mudd’s annual ROI is 8.3%, for a total return of $2,113,000 over 30 years. Harvey Mudd ranks No. 28 on the Forbes list. A typical starting salary for a Harvey Mudd grad: $66,800.
Second on the ROI list: California Institute of Technology, known as Caltech, a research university in Pasadena, Calif. with 1,000 undergrads and 1,200 graduate students, which many consider the west coast rival of MIT (No. 4 on the Payscale list). Like Harvey Mudd, Caltech focuses on technology and engineering, producing grads who command high salaries. The30-year ROI at Caltech is 8.2% or $1,991,000. Caltech ranks 18 on Forbes’ list. A typical starting salary for a Caltech grad: $67,400.
No. 3: Polytechnic Institute of New York University, the second-oldest private engineering school in the U.S. Located in Brooklyn, N.Y., in 2008 it became affiliated with New York University. It has 1,900 undergrads and 2,500 graduate students. Its 30-year ROI: 7.6% or $1,622,000. A typical starting salary for a Polytechnic grad: $56,800.
While Payscale focuses purely on ROI, its methodology bears some explanation. First, where does it get its data? People use Payscale to find out what a potential new job pays and/or whether they are earning a fair wage in their current post. In exchange for the data, users fill out questionnaires where they offer information about what they are making. The site has accumulated a data set of some 40 million user-submitted profiles. From those profiles it gleans the salaries of alumni from various schools, examining the years those people graduated from college going back thirty years. Then it takes the mean salary for each graduate year and uses that to do its calculation. Example: It looks at Harvey Mudd alums who graduated in 1983, 1984, 1985 and so forth and takes the mean salary those grads are earning and adds up the numbers to get a 30-year ROI.
One important note: If an alum goes to graduate school, including business or law school, they don’t get counted because it’s impossible to know how the graduate school degree affected their earning power. Another note about Payscale’s calculation: It is comparing the mean amount earned by alums, compared to what they would have earned had they only gotten a high school degree. Payscale also considers the numbers of students who finish their bachelor’s degrees at each school in four, five and six years and weights the cost accordingly. Its main calculation assumes that the students have paid the full sticker price, without aid, though for public schools, it does two separate calculations, one for in-state tuition and the other for out-of-state. That’s why state schools like Colorado School of Mines appear twice on the list.
There is more intriguing data if you spend time on Payscale’s site: You can click through each school and see salary data on the job titles reported by each school. For Harvey Mudd, for instance, Senior Software Engineers make the best salaries, at $104,000. For Stanford, No. 10 on the list, Senior Software Engineer is also the most highly paid job, at $115,000. Notably, there are several schools where Chief Executive Officer is the highest-paying job. Harvard, at No. 15, shows its CEO alums making a mean salary of $207,000. Claremont-McKenna, No. 13, also shows CEO as the highest-paying job for alums, at $302,000. These schools apparently produce more bosses than do some of the other highly rated schools.
The top 25 list includes two schools that I had never heard of. Both are state maritime academies. One is SUNY Maritime College, founded in 1874 and based in the Bronx, N.Y. It has 1,700 undergraduates and military service is not mandatory for grads. The 30-year ROI for in-staters is a hefty $1,586,000 and for out-of staters, $1,552,000. On its website, the school boasts that nearly 100% of its alums find employment post-graduation. Massachusetts Maritime Academy, which dates back to 1891, is also in the top 25. As at SUNY Maritime, students are not required to join the military on graduation. Based in Buzzards Bay, Mass., it has 1,100 undergraduates, known as cadets. The 30-year ROI for in-staters is $1,316,000 and for out-of-staters, $1,259,000.
Since Payscale is by necessity backward-looking, it’s difficult to know how new students will fare as schools’ characters change, massive online courses start to affect the traditional college set-up and the demands of the marketplace evolve. But as the debate continues about whether it’s worth it for students to pay ever-increasing tuition rates for degrees from traditional colleges, ROI is arguably one of the best measures to examine when making a college choice. It’s also striking that two of the top schools are maritime academies founded more than two centuries ago
But what if you’re concerned mainly with the money you will earn, compared to the amount you are shelling out to pay for your degree, particularly now that the four-year tab for most private colleges exceeds $200,000? Payscale recently released a list of more than 1,500 schools measured purely by the 30-year return on investment (ROI) for Bachelor’s degrees. The site also tracks typical starting salaries for graduates of these schools.
The three schools at the top of the list all emphasize technology and engineering. No. 1: Harvey Mudd College, a four-year private liberal arts college with 775 students in Claremont, Calif., that is part of the five-college consortium that includes Pomona and Claremont-McKenna. According to Payscale, Harvey Mudd’s annual ROI is 8.3%, for a total return of $2,113,000 over 30 years. Harvey Mudd ranks No. 28 on the Forbes list. A typical starting salary for a Harvey Mudd grad: $66,800.
Second on the ROI list: California Institute of Technology, known as Caltech, a research university in Pasadena, Calif. with 1,000 undergrads and 1,200 graduate students, which many consider the west coast rival of MIT (No. 4 on the Payscale list). Like Harvey Mudd, Caltech focuses on technology and engineering, producing grads who command high salaries. The30-year ROI at Caltech is 8.2% or $1,991,000. Caltech ranks 18 on Forbes’ list. A typical starting salary for a Caltech grad: $67,400.
No. 3: Polytechnic Institute of New York University, the second-oldest private engineering school in the U.S. Located in Brooklyn, N.Y., in 2008 it became affiliated with New York University. It has 1,900 undergrads and 2,500 graduate students. Its 30-year ROI: 7.6% or $1,622,000. A typical starting salary for a Polytechnic grad: $56,800.
While Payscale focuses purely on ROI, its methodology bears some explanation. First, where does it get its data? People use Payscale to find out what a potential new job pays and/or whether they are earning a fair wage in their current post. In exchange for the data, users fill out questionnaires where they offer information about what they are making. The site has accumulated a data set of some 40 million user-submitted profiles. From those profiles it gleans the salaries of alumni from various schools, examining the years those people graduated from college going back thirty years. Then it takes the mean salary for each graduate year and uses that to do its calculation. Example: It looks at Harvey Mudd alums who graduated in 1983, 1984, 1985 and so forth and takes the mean salary those grads are earning and adds up the numbers to get a 30-year ROI.
One important note: If an alum goes to graduate school, including business or law school, they don’t get counted because it’s impossible to know how the graduate school degree affected their earning power. Another note about Payscale’s calculation: It is comparing the mean amount earned by alums, compared to what they would have earned had they only gotten a high school degree. Payscale also considers the numbers of students who finish their bachelor’s degrees at each school in four, five and six years and weights the cost accordingly. Its main calculation assumes that the students have paid the full sticker price, without aid, though for public schools, it does two separate calculations, one for in-state tuition and the other for out-of-state. That’s why state schools like Colorado School of Mines appear twice on the list.
There is more intriguing data if you spend time on Payscale’s site: You can click through each school and see salary data on the job titles reported by each school. For Harvey Mudd, for instance, Senior Software Engineers make the best salaries, at $104,000. For Stanford, No. 10 on the list, Senior Software Engineer is also the most highly paid job, at $115,000. Notably, there are several schools where Chief Executive Officer is the highest-paying job. Harvard, at No. 15, shows its CEO alums making a mean salary of $207,000. Claremont-McKenna, No. 13, also shows CEO as the highest-paying job for alums, at $302,000. These schools apparently produce more bosses than do some of the other highly rated schools.
The top 25 list includes two schools that I had never heard of. Both are state maritime academies. One is SUNY Maritime College, founded in 1874 and based in the Bronx, N.Y. It has 1,700 undergraduates and military service is not mandatory for grads. The 30-year ROI for in-staters is a hefty $1,586,000 and for out-of staters, $1,552,000. On its website, the school boasts that nearly 100% of its alums find employment post-graduation. Massachusetts Maritime Academy, which dates back to 1891, is also in the top 25. As at SUNY Maritime, students are not required to join the military on graduation. Based in Buzzards Bay, Mass., it has 1,100 undergraduates, known as cadets. The 30-year ROI for in-staters is $1,316,000 and for out-of-staters, $1,259,000.
Since Payscale is by necessity backward-looking, it’s difficult to know how new students will fare as schools’ characters change, massive online courses start to affect the traditional college set-up and the demands of the marketplace evolve. But as the debate continues about whether it’s worth it for students to pay ever-increasing tuition rates for degrees from traditional colleges, ROI is arguably one of the best measures to examine when making a college choice. It’s also striking that two of the top schools are maritime academies founded more than two centuries ago
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