Is College Still Worth It? A Practical Guide to Evaluating ROI
"My son got into a great private university, but the cost is $85,000 a year. Meanwhile, he could go to our state school for $30,000. How do we know if the expensive school is actually worth it?"
The conversation around college has shifted dramatically. With mounting student debt, high-profile dropouts succeeding without degrees, and growing skepticism about the “value” of higher education in the US, families are (understandably) asking: Is college still worth the investment?
Having spent much of my career in admission offices, promoting the highlights and virtues of the various institutions I’ve represented, I can tell you the answer isn't a simple yes or no. A more meaningful question is: which college is worth it for your student, and how do you determine that?
Why the ROI Question Matters More Than Ever
Let's acknowledge what's changed. The average cost of college has increased faster than inflation, wages, and virtually everything else. Meanwhile, stories circulate about liberal arts majors working as baristas with $100,000 in debt, and tech entrepreneurs who dropped out of Stanford to build billion-dollar companies.
This skepticism isn’t entirely unwarranted, but the undeniable reality is that college graduates earn more over their lifetimes, experience lower unemployment, and report higher life satisfaction than those without degrees. According to research by the Georgetown University Center on Education and the Workforce, the average lifetime earnings of college graduates are approximately $1 million higher than those of individuals with only a high school diploma.
Of course, not all college experiences deliver the same return, and families need better tools to evaluate which investment makes sense for them.
Rethinking ROI: It's Not Just About Money
When families ask me about ROI, they're usually thinking purely in financial terms: tuition cost versus future salary. But that's only part of the equation.
Return on investment in higher education actually has multiple dimensions:
Financial ROI: Will this degree lead to a career that justifies the cost?
Intellectual ROI: Will my student be challenged, grow intellectually, and develop critical thinking skills?
Network ROI: Will this institution connect my student with peers, professors, and alumni who open doors?
Personal ROI: Will my student develop independence, discover their passions, and become who they're meant to be?
Career ROI: Will this degree provide the credentials, skills, and opportunities needed for their intended career path?
The best college choice optimizes across all five dimensions.
Financial ROI: The Numbers You Need
Let's start with the most tangible aspect: money. Here's how to evaluate financial ROI:
Calculate True Cost of Attendance
Don't just look at sticker price. Calculate:
Tuition and fees
Room and board
Books and supplies
Transportation
Personal expenses
Minus: scholarships, grants, and work-study (don't subtract loans, as they have to be repaid)
Net price is what you'll actually pay. A $70,000 school with a $40,000 scholarship costs less than a $35,000 school with no aid.
Project Potential Earnings
Research typical starting salaries for your student's intended major using:
PayScale.com's College Salary Report
Bureau of Labor Statistics Occupational Outlook Handbook
University-specific career outcomes data (schools are required to report graduate employment)
LinkedIn salary insights for specific schools and majors
Think realistically. If your student wants to major in social work (median starting salary: $51,000), attending a pricey institution and racking up $200,000 in loans is not likely to be a financially prudent move. If, on the other hand, your student will be pursuing a degree in electrical engineering (median starting salary: $120,000+), the higher cost of attending that same institution may well be justified.
Calculate Debt-to-Income Ratio
As a helpful guide for Financial ROI-conscious families, I typically advise keeping the total loan debt below the annual salary their student expects to earn in their first year of working after college.
Monthly loan payments will be roughly 1% of total debt for a 10-year repayment plan. So $50,000 in loans means about $500/month in payments. Can your student afford that on their projected salary while also paying rent, buying groceries, and saving for the future?
Compare Graduation Rates
A four-year degree that takes six years to complete costs 50% more and delays earnings by two years. Look at each school's four-year and six-year graduation rates. Schools with low graduation rates may seem more affordable at first glance, but they’ll cost more in the long run.
Consider Geographic Factors
Where does your student want to work after graduation? A degree from a regional state university might have excellent ROI if they plan to work in that state, where the alumni network is strongest and the school's reputation is well-established. Meanwhile, a more expensive national university might be worth it if your student wants geographic flexibility or is targeting competitive markets like New York or San Francisco.
Career ROI: Does This Degree Open the Right Doors?
Some careers require specific credentials, while others are more flexible.
When the Degree Path Is Clear:
Medicine: You need a bachelor's degree, then medical school. Where you go for undergrad matters less than GPA, MCAT scores, and research experience. Save money for med school.
Engineering: Accreditation matters. ABET-accredited programs ensure your degree will be recognized. Brand name matters less than accreditation and internship opportunities.
Education/Social Work: State schools often have the strongest regional networks and are significantly more affordable. The prestigious private university won't necessarily help you get a teaching job.
Law/Business: Undergrad institution matters much less than your performance and what you do after graduation. Save money for law school or business school, where prestige has more impact.
When the Path Is Less Clear:
For students who aren't sure what they want to do, consider:
Career services strength: Does the school have robust internship programs, career counseling, and employer connections?
Alumni network: Can graduates help your student find opportunities? This is where certain universities punch above their weight.
Location: Is the school near industries or companies your student might want to explore?
Experiential learning: Does the school offer co-ops, research opportunities, study abroad, or other experiences that build résumés?
Intellectual and Personal ROI: The Intangibles That Matter
This is an area where some families can be misguided. They over-focus on career outcomes while neglecting the importance of institutional/environmental characteristics that will impact their student’s growth, character development, and overall happiness.
Some questions to consider:
Academic Environment:
Will your student be challenged by peers and faculty?
Are class sizes conducive to learning (small seminars vs. 500-person lectures)?
Do professors actually teach undergraduates, or mostly graduate students and teaching assistants?
What academic support systems are available for students you find themselves struggling?
Campus Culture:
Does the environment match your student's personality and values?
Will they find their people – friends who will support, appreciate, and inspire them?
What resources are available to promote and support community, connectedness, and overall well-being?
Development Opportunities:
Will your student have opportunities to lead, explore interests, and take intellectual risks?
What resources are available for students who are still trying to find their path?
These factors are more difficult to quantify, but they can often make the difference between thriving and merely surviving. A student who is engaged, challenged, and fulfilled will get far more value from their education than one who is miserable at a more “prestigious” school on paper.
The Graduate School Calculation: Different Rules Apply
For those considering graduate or professional programs, the ROI equation changes significantly:
MBA Programs:
Top-tier MBA programs (think Harvard, Stanford, Wharton) genuinely open different doors and command significantly higher salaries. The prestige premium is real. Regional MBA programs typically cost less and can offer solid ROI, especially for grads who end up working in the same region.
However, if you're borrowing $200,000 for an MBA from a school outside the top 25, run the numbers very carefully. Many mid-tier MBA programs don't justify their cost.
Law School:
Top-tier JD programs lead to dramatically different outcomes than their lower-ranked peers. The hefty salaries paid by big law firms are typically reserved for graduates of top law schools. If you're not getting into a top school or receiving significant scholarship money, you need to carefully consider whether law school is financially viable.
Of course, there are always exceptions. If you’re offered a full scholarship to a regional school and intend to practice in that area, the ROI can still be strong.
Medical/Healthcare Professional Programs:
For most medical specialties, the pedigree of the school matters less than you might expect. The more important factors are (a) getting in, (b) performing well, and (c) matching into your desired residency. Because you’ll be in school for many years, it’s also prudent to minimize debt where possible.
Master's Programs:
Highly variable. An MS in Computer Science or Data Science from a reputable program often has excellent ROI. An MA in many humanities fields typically does not, unless you're pursuing it for personal enrichment rather than career advancement, or you're on a funded PhD track.
Red Flags: When the ROI Doesn't Add Up
Walk away (or seriously reconsider) if:
Total debt will exceed expected first-year salary by 2x or more
The school has a graduation rate below 60% (students aren't finishing)
Career services are non-existent or weak
You're borrowing heavily for a major with limited job prospects and your student isn't passionate enough to overcome those odds
The school's reputation is mainly driven by marketing rather than demonstrable outcomes
Your student is choosing the school primarily for prestige rather than fit
You would need to rely on private loans, typically with higher interest rates (beyond federal student loans)
Green Lights: When Higher Cost Might Be Worth It
Consider paying more if:
The school has significantly better career outcomes in your student's field
The scholarship/aid package makes the "expensive" school more financially attainable
The school has a well-established pathway to a very specific career of interest for your student
The school offers unique opportunities (research, co-ops, study abroad) not available elsewhere
The network and alumni connections genuinely open doors
Your family can afford it without loans that will burden your student for decades
The academic environment is substantially stronger, and your student will be more challenged and engaged
The State School vs. Private School Question
State schools often offer the best ROI, especially your in-state flagship. They're more affordable, often have strong alumni networks within the state, provide solid academics, and lead to good career outcomes. The "prestige premium" of a more expensive private school often doesn't justify the cost difference.
However, there are scenarios where private schools make sense:
The private school costs the same or less after financial aid
Your student needs smaller class sizes and more support to thrive
The private school has substantially better outcomes in your student's specific field
Your student is considering graduate school, and the private school has better placement rates
The key is running the actual numbers for your family's situation rather than making assumptions.
How to Have the ROI Conversation With Your Student
Let’s first acknowledge "we can't afford your dream school" is not a particularly encouraging message for a 17-year old to hear. But here's how it can be reframed:
Be honest about finances early. Don't let your student fall in love with schools you can't afford. Have the money conversation before applications, not after acceptances.
Couch it as setting them up for success. "We want you to graduate without crushing debt so you can take the job you want, travel, save for a house, and have financial freedom."
Emphasize fit over prestige. "The goal isn't to get into the most impressive school. It's to find the place where you'll thrive, learn, and grow."
Explore a range of options. Consider strong-fit schools that are known for higher merit scholarships for students with similar backgrounds and qualities. Enroll in community college for a year or two before transferring. Take a gap year to work and save money.
Let them have skin in the game. If they're set on the expensive school, what will they contribute? Summer jobs? Work-study? This builds ownership and responsibility.
Tools and Resources for Evaluating ROI
Net Price Calculators: Every college website has one. Use them early to estimate actual cost after financial aid.
College Scorecard (collegescorecard.ed.gov): Government database showing costs, graduation rates, and post-graduation earnings by school and major.
PayScale College ROI Rankings: Ranks schools based on 20-year return on investment.
LinkedIn: Search "[School name] alumni" and see where graduates actually end up working.
University Career Services Data: Most schools now publish data on graduate outcomes. The lack of such data may be data in and of itself.
Bureau of Labor Statistics: Research career outlooks and salary ranges for intended professions.
The Bottom Line
Is college worth it? Yes, but not any college at any price.
The families who get the best ROI are those who:
Run the numbers honestly before making decisions
Prioritize fit and career outcomes over prestige
Minimize debt aggressively
Choose schools where their student will be challenged and engaged
Think long-term about careers and life goals
The families who end up with buyer's remorse are those who:
Let emotion override financial reality
Borrow heavily without understanding the long-term implications
Choose schools for the wrong reasons (prestige, friends, parents' preferences)
Ignore warning signs about graduation rates and career outcomes
Your student can get an excellent education and launch a successful career from many different institutions. The key is finding the one that offers the best combination of academic quality, career opportunities, personal fit, and financial reality for your specific situation.
The "best" school isn't the one with the most impressive name. It's the one that helps your student grow, prepares them for meaningful work, and doesn't saddle them with debt that constrains their choices for many years thereafter.