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How to Check the ROI of Academic Programs

On the Foundation for Research on Equal Opportunity website, advisors and clients can search for the ROI of individual programs offered by private and state colleges and universities.

A major preoccupation of collegebound students today, whether they are pursuing a bachelor’s degree or aiming for medical school or any academic program in between, boils down to this question:

What kind of income can I make after I earn the degree?

This is a critical question, but overall statistics can be highly misleading. For instance, the U.S. Bureau of Labor Statistics calculates that individuals who graduate with a bachelor’s degree earn 68% more than Americans with a high school diploma. 

Tremendous salary ranges, however, exist even among individuals who major in the same discipline. Here is an example:

Undergraduate business majors who graduate from the University of Virginia enjoy an estimated return on investment over their careers that exceeds $3 million. In contrast, 13% of individuals with undergrad business degrees end up with a negative ROI.

The value of a college degree over a working lifetime will vary greatly, not just from school to school but also within disciplines.

This phenomenon is helpfully illustrated by a new resource you and your clients can use that estimates the lifetime ROI of more than 40,000 undergraduate majors, sub-baccalaureate credentials at schools across the country and over 10,000 programs for master’s and PhD programs, as well as medical, dental and law schools.

The Foundation for Research on Equal Opportunity, a nonprofit think tank, produced the ROI figures by using new data from the U.S. Department of Education’s College Scorecard, as well as the U.S. Census American Community Survey. You can learn more about the methodology here.

Report Highlights

Here are some of the key findings:

  • The average ROI for graduates with a bachelor’s degree is $160,000.
  • Bachelor’s degrees in engineering, computer science, nursing and economics tend to produce ROIs of $500,000 or more. In contrast, such majors as education, psychology and English have a far smaller ROI or none at all.
  • The ROI for certificates in technical trades such as vehicle maintenance and repair, precision metal working and HVAC technology has a median ROI of $313,000, which is significantly higher than the typical bachelor’s degree.
  • Associate degrees and certificate programs in the liberal arts have no ROI. 

The report offers a cautionary tale for individuals who think they need to earn a master’s degree to boost their pay and career options. According to the Bureau of Labor Statistics, workers with a master’s degree earn 16% more than those with just a bachelor’s degree.

The report concluded, however, that nearly half of master’s degree programs leave graduates worse off financially. The report explains this is due to the high cost of the degrees and the often-modest pay bump.

Using the ROI Tool

On the website, you can search for the ROI of individual programs offered by private and state colleges and universities by using the following filters:

  • Academic major
  • Name of the specific institution
  • Type of institution
  • State
  • Type of degree

Here is the link to search for certificate programs and associate and undergraduate degrees.

Here is the link to look for graduate and professional degrees.

Playing around with the database can generate surprising results and turn up institutions that families might ordinarily overlook.

That happened, for instance, when I searched for the ROI figures for public universities offering master’s degrees in accounting. The top schools probably wouldn’t have been on many people’s bingo card. The institution with the best ROI ($500,544) was Northeastern State University in Oklahoma followed by Old Dominion University in Virginia ($489,054) and Binghamton University in New York ($460,889).

When searching for private schools in the same category, New York University was the winner with an ROI of $629,604, but among the private institutions in the ROI top 10 was Ithaca College in New York, University of Miami in Florida, St. Thomas University in Florida and University of Scranton in Pennsylvania.

What’s as important as pinpointing schools that produce graduates with enviable earnings potential is identifying institutions that fail their graduates.

A search for schools with the best and worst ROI for undergraduate degrees in psychology illustrate this. Psychology, which is one of the most popular majors, has one of the lower ROI among undergrad degrees. Yet there are some schools, including elite East Coast institutions that perform spectacularly.

Trinity College, a liberal arts college in Connecticut, gets top honors with an ROI of $1,474,678. Other schools in the top 10 include Duke University, Colgate University, Hamilton College, Yale University and the University of Notre Dame. 

In contract, the ROI bottom dwellers for undergraduate psychology degrees include other expensive coastal institutions including The New School (negative ROI $643,722), Scripps College (negative ROI $379,880) and Bates College (negative ROI $257,831).

Bottom Line:

The ROI of an academic program overall and at individual institutions doesn’t mean that an individual can’t do better or worse financially. I’d argue, however, that it is important to check out ROI figures before committing to a degree program and putting down a deposit at any college or university.


Lynn O’Shaughnessy, a nationally recognized college expert, offers an online course – Savvy College Planning - exclusively for financial advisors. Click here to get Lynn’s guide, Finding the Most Generous Colleges.

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