The price of college can be difficult to estimate. Scholarships and grants can cut costs, while fees and housing can add to the total that students pay. At the same time, many students do not have the information they need to understand how much their degree will be worth after graduation.
CNBC Make It set out to determine which colleges provide the best return on students' time and money. The result is our list of the U.S. Colleges That Pay Off the Most, a ranking that spotlights the 50 schools that provide students the highest average salaries for their tuition dollars.
Here's how we did it.
We started with the true net cost of each college, which measures how much students pay (including tuition, fees, books, supplies and other expenses) after subtracting scholarships and grants, for students from families making between $48,001 - $75,000, an income range established by the Department of Education. We chose to consider the net cost for this income bracket in order to represent the true cost of college for average Americans and to highlight schools that provide them generous support.
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To determine average net cost for this demographic, we used data from Tuition Tracker, a tool produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. The Tuition Tracker compiles data provided by the U.S. Department of Education from the Integrated Postsecondary Education Data System (IPEDS) from 2008 to 2019 to project costs for the 2020-2021 school year.
We considered the top 250 colleges and universities included in PayScale's College Salary Report, which compiles data from an ongoing, online compensation survey of 3.5 million respondents, representing more than 4,000 colleges and universities across the U.S.
PayScale calculates the median salary for alumni with less than five years of experience and median salary for alumni with over 10 years of experience. For our 2020 ranking, we chose to only consider the average salary for alumni with more than 10 years of experience in order to capture the potential earnings growth among college graduates.
Only bachelor's degree-granting schools were considered, as opposed to community colleges, which award associate's degrees. We excluded military schools from the list, including tuition-free institutions like West Point and The Naval Academy, because the cost of post-college military service introduces an additional factor that's challenging to measure against other schools. We also excluded military colleges that require ROTC service.
And while the cost of attending college and what students can expect to earn in the future is essential information to have when making a decision about a school, students shouldn't make their college decisions based solely on potential earnings — or even our ranking.
"Information about earnings tied to a college education is one piece of data," Lydia Frank, vice president of content strategy at PayScale, tells CNBC Make It. "It's an important piece, because if you are funding your education through loans, it makes a ton of sense to understand your capacity for paying that off after graduation."
However, Frank says, as with all financial investments, there are many things to consider. Pay is "just one piece of information. There's a host of other factors that can help you best understand whether a college is a fit for you."
You can check out the full list of the U.S. colleges that pay off the most here.
Special thanks to the The Hechinger Report and PayScale for their contributions to this list. Thanks also to Akila Weerapana, associate professor of economics at Wellesley College; Christopher Hayes, quantitative analyst at CNBC; Jon Rork, professor of economics at Reed College; Thomas Bailey, economics professor and president of the Teachers College at Columbia University; and Hassan Enayati, economist and research associate at the Institute for Compensation Studies at Cornell University, for their insights.