ROI of Higher Education

Definition

Benefits generated minus costs incurred

Lowest lifetime ROI

Bachelor's of Education at -55.43%

Factors linked to ROI

Acceptance rates, graduation rates, percentage of degrees offered in STEM fields, share of undergraduates receiving federal aid, share of undergraduates receiving Pell Grants

Lifetime ROI for Economics

1,707.80%

Lifetime ROI for Computer engineering

1,743.81%

Average ROI for Bachelor's in Education

-54.67%

Lifetime ROI for Business degree (finance)

1,842.38%

Lifetime ROI for Computer and information sciences

1,752.59%

Lowest median annual returns by field (NYU research)

Education, humanities, and arts majors (below 8%)

Percentage of students in programs with negative ROI

31%

Highest median annual returns by field (NYU research)

Engineering and computer science majors (over 13%)

Average initial investment for Bachelor's of Education

$273,295

Average cost of tuition and fees for Bachelor's of Education

$159,508

2016-XX-XX

2025-XX-XX

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Undated

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on investment3 in public higher education from the state’s perspective.4 Fundamentally, the calculation is the same: the ROI is benefits generated minus costs incurred. However, many implications of increased education at a larger scale are ambiguous—it is not always clear, from the state’s perspective, what counts as a benefit or a cost. Below, we provide an overview of the benefits and costs state policymakers may consider in determining whether and how to make further investments in higher [...] enrollment. In addition, EVALUATING THE RETUR N ON INVESTMENT IN H IGHER EDUCATION 15 many states have built, or are in the process of building, longitudinal data systems that follow students from K–12 education into college and the workforce. But calculating and increasing the overall ROI in higher education, whether for an individual or at a state level, is more complex than just looking at raw data or tinkering with the inputs and outputs of an equation. Improving the return to higher [...] Community Survey, 2016, 38% 26% 19% 13% 5% 3% 34% 26% 20% 14% 6% 4% 4% 3% 2% 2% 1% 0% Less than high school High school Some college Associate's Bachelor's Graduate Food stamps (SNAP) Medicaid Public assistance (including TANF) Level of education 12% 9% 6% 5% 3% 2% Less than high school High school Some college Associate's Bachelor's Graduate Level of education 12 EVALUATING THE RETUR N ON INVESTMENT IN H IGHER EDUCATION Increased Education Leads to Many Intangible Social Benefits Many states’

The remainder of this report will focus on the completion-adjusted version of ROI, as it is the most comprehensive measure of higher education’s financial value. Of course, readers should remember that the estimates reported here are for the “typical” student in each program. But no student is exactly typical. Most students will enjoy higher or lower ROI than the estimates reported here. While outcomes for the typical students are the best way to analyze the overall financial value of higher [...] Overall, 31 percent of students are enrolled in higher education programs that do not lead to a return on investment. In other words, ROI for these programs is negative: the earnings benefits of the degree are unlikely to fully compensate students for the cost and risk of pursuing post-secondary education. [...] While ROI should not be the only consideration for students approaching the college decision, the ROI estimates presented in this report can help students and their families make better choices regarding higher education. The estimates may also be of interest to other stakeholders, including policymakers, researchers, journalists, and institutions. The full ROI estimates for undergraduate programs are available here. The full ROI estimates for graduate programs are available here.

Researchers found that five factors were linked to ROI: acceptance rates, graduation rates, percentage of degrees offered in STEM fields, the share of undergraduates who receive any federal aid, and the share of undergraduates who receive Pell Grants. Graduation rates are most strongly correlated with ROI at nonprofit and public institutions primarily awarding mostly bachelor’s degrees, but not at for-profit institutions. Among the top 10 colleges with high ROI, eight are nursing and health [...] Georgetown University’s Center on Education and the Workforce (CEW) recently updated its database ranking 4,600 U.S. colleges and universities by return on investment (ROI). Researchers calculated ROI by multiplying a school’s cost of attendance by the number of years an average student might be enrolled. The average student is enrolled five years at a bachelor’s degree-granting institution and three at an institution awarding associate degrees. CEW researchers then subtracted that total cost [...] “People are clearly looking more at ROI as the continued public perception and distrust of postsecondary [institutions] is taking hold with increasing costs,” Jeff Strohl, CEW director, told Higher Ed Dive. “Tools like this get us straight to the punch to show people where value lies.”

The average ROI for a bachelor’s degree in education is -54.67%. Relative to the cost of tuition alone, the average lifetime return is -22.33%. [...] The most cost-efficient degree is a business degree in finance, with a lifetime ROI of 1,842.38%. Computer and information sciences (1,752.59%),(#1) ((#3) #4) computer engineering (1,743.81%), and economics (1,707.80%) also have high returns. Despite having a lower ROI, a computer engineer’s lifetime returns exceed a business finance major’s by $1.182 million. A Bachelor’s of Education offers the lowest lifetime ROI at -55.43%, representing a $149,407 loss in degree-based earnings. [...] The ROI for a Bachelor’s of Education is based on a starting salary of $47,846 and an initial investment of $273,295. $159,508 is the average cost of tuition and fees to earn a Bachelor’s of Education; this represents 58.36% of the total initial investment. A recent graduate with a Bachelor’s of Education can expect to earn a lifetime total of $5.399 million. A 2025 graduate with a Bachelor’s of Education can expect to earn a lifetime $5.685 million.