As decision day approaches for high-school seniors, students and their families will have to figure out which college is worth their money.
Compensation data company PayScale crunched the numbers to come up with its own answers based on a school's return on investment. PayScale calculated ROI as the difference between the 20-year median salary of a graduate who earned a bachelor's degree based on data from 1.3 million people the company surveyed online minus the college's four-year, on-campus cost without financial aid from the Department of Education.
Ivy League schools did not top PayScale's ROI ranking. Instead, colleges that specialize in engineering dominated the list. The average ROI for engineering schools was $653,000 compared with less than $157,000 for liberal arts colleges.
"The intent of the list is not to say that everyone should go to school to become an engineer because that has the highest return on investment," said Lydia Frank, PayScale's vice president of content strategy. "It's really to show that students need to be thoughtful about how they will fund their education."
Last year, 42.4 million Americans owed $1.3 trillion in federal student loans. "Most high school seniors don't have perspective on how much they will make after they graduate college," Frank said. "You don't want to be a library sciences major with a $100,000 in student loan debt."
PayScale reviewed 521 public universities and 901 private colleges for its full ranking. Here are the top 5 colleges based on their 20-year return on investment. For state schools, the numbers in the summaries are for in-state students.
Total 4-year cost: $123,000
20-year return on investment: $883,000
Annualized return on investment: 11.1%
Coloradans who graduate this engineering school can expect to receive a good value for their effort. It's not a bad deal for out-of-staters either, with those graduates earning an average of $818,000 for spending $188,000 for four years of college.
Total 4-year cost: $92,300
20-year return on investment: $895,000
Annualized return on investment: 12.6%
Several seafaring schools took top honors in PayScale's analysis. Out-of-state graduates at SUNY Maritime College were ranked seventh on the list.
Total 4-year cost: $240,000
Total 20-year return on investment: $959,000
Annualized return on investment: 8.4%
Though four years at MIT can cost nearly a quarter of a million dollars, graduates propelled themselves to the third spot on the list based on 20 years of earnings.
Total 4-year cost: $260,000
Total 20-year return on investment: $962,000
Annualized return on investment: 8%
This private school, which specializes in engineering, science and math, is the third priciest college on the list. The premium students pay may be worth it based on the high average salaries graduates can earn.
Total 4-year cost: $33,100
Total 20-year return on investment: $1,056,000
Annualized return on investment: 19.1%
This federal service academy was the only college on the list with a seven-figure ROI, which was due to the school's subsidized tuition and high salaries for graduates.
"The maritime schools have floated to the top, but that's not surprising given the demand and pay for marine engineers," Frank said.
The median annual wage for marine engineers was $93,110, according to the Department of Labor, and the top 10 percent in the field earned more than $149,330 on average.