PayScale Publishes Third Annual Report About College Return On Investment (ROI)

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Engineering schools dominate list for third consecutive year; Amidst student loan crisis, large number of schools have negative ROI

PayScale, Inc. today announced its 2012 College Return on Investment (ROI) Report. Based on an analysis of PayScale's 35 million career profiles, the report examines the return on investment at 853 colleges and universities. This is an increase from the 691 colleges and universities that were analyzed in 2011.

PayScale has grouped the schools into eight categories: Private Research University; Liberal Arts School; Arts, Music & Design School; Business School; Engineering School; Ivy League School; Private School; and Public School. The report also shows the comparison between in-state and out-of-state tuition for public universities and the difference in ROI for students who receive financial aid and those who do not.

Some highlights from Payscale's 2012 College Return on Investment (ROI) Report:

  •     Engineering schools continue to dominate the list. The average 30-year net ROI for engineering schools is more than double the ROI for liberal arts schools ($561,135 vs. $183,299).
  •     The two states with the largest presence of high ROI schools are Massachusetts and California: 11 of the top 30 schools for ROI are in Massachusetts (five schools) or California (six schools).
  •     Only nine schools this year show a 30-year net return of $1 million or more; a mere 1 percent of schools on the total list. This goes to show that college is not a $1 million dollar guaranteed return as so many people tout.
  •     About 200 schools on the list have a negative return on investment. For these schools, the cost of attending school far outweighs the benefit.
  •     The Ivy League performs well: four are in the top 10, six are in the top 15 and all eight are in the top 35 for 30-year net ROI.

For more information on methodology, please go to:

“As the student loan discussion in the country continues and questions about the return on investment of the college and university experience persist, the PayScale College Return on Investment report highlights the connection between cost, areas of academic study, and future salary potential,” says Katie Bardaro, Lead Economist at PayScale. “Our data makes clear that, once again, engineering schools provide the greatest return on investment opportunity.”

In previous years, the PayScale College Return on Investment Report, used 34-36 year median high school pay. This year, 34-36 year 75th percentile high school pay was used, based upon the hypothesis that the typical person who gets accepted to and enrolls in college is likely to have higher potential earnings than the typical high school graduate. Therefore, it is approximated that by using the 75th percentile pay, it represents a bar for top-earning high school graduates as 75 percent of high school graduates earn less. In using this measure, PayScale is more closely modeling the choice faced by college-bound high school graduates.

About PayScale
Creator of the largest database of individual compensation profiles in the world, PayScale, Inc. provides an immediate and precise snapshot of current market salaries to employees and employers through its online tools and software. PayScale’s products are powered by innovative search and query algorithms that dynamically acquire, analyze and aggregate compensation information for millions of individuals in real time. Publisher of the quarterly PayScale Index(tm), PayScale's subscription software products for employers include PayScale MarketRate(tm) and PayScale Insight(tm). Among PayScale's 2,200 corporate customers are organizations small and large across industries including Zappos, Volunteers of America and Manpower.

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