When building the college list, many students fall into the same trap...only considering colleges that they already know. Venture into any high school in America and the college counselors will likely say that their students tend to apply to colleges within a fairly close radius of home. Because of this, many high schools observe a common set of colleges where their students apply. Why does this happen? One of the reasons is that we only “know” what we know. Combine this with the fact that application season tends to sneak up on all but the most fastidious students and we see that students tend to start plugging colleges they already know into their list. In this three-part series on researching colleges, we will begin with one of the least considered factors of college research….getting the most bang for your buck!
If you’re a serious college-hunter and not just looking for where the biggest party crowd is heading, then you might want to shop for a college that will give you the “biggest bang for your buck” or in business lingo, ROI (return on investment). The total cost of your undergraduate degree without any grants, scholarships, or loans at a four-year institution can average between $50,000 to over $200,000. It is well worth taking the time now to consider the financial options you have for your college education. As you do your research, keep the information you find in a spreadsheet where you can easily refer back to your findings.
Cost of attendance (COA) usually includes tuition for a full-time student, average cost of room and board options, travel to and from home, personal expenses, and books. Your true COA will vary depending on the options you choose for your housing and meal plan, books (used vs. new), and your travel expenses to and from college. It will also vary depending on whether you receive any need-based, merit aid, or outside scholarships. COA is an estimate for one year of college costs. Multiply this by (hopefully) 4 years of attendance and the product will represent the INVESTMENT you will make in your future earning potential.
Now…What About a Return on that Investment!
Since we know that many students are going to be dishing out a pretty hefty chunk of change on that college degree, let’s talk about the factors that indicate whether a college will give you a good ROI:
1) Graduation rate - You are expecting to get a 4-year degree in four years, right? Would it surprise you to hear that many students take longer than four years to complete their undergraduate degree? Researching a college’s graduation rate will indicate the percentage of students at that institution that graduate with their bachelor’s degree within SIX years. The higher the graduation rate, the better the institution is in helping their students to be successful and stay on track to graduate quickly. This means the student incurs less debt. Are there good reasons for a student to take longer than four years to graduate with their degree? Yes, there are! Some degrees like engineering tend to take longer to complete because of the math and science intensive curriculum. Also, study abroad and internships can add extra time to completing your degree, but these are very worthwhile endeavors that build your resume and experience in your field making you a more valuable candidate for employment.
2 ) Retention rate - The retention rate of an institution refers to the percentage of students who begin as freshman and return as sophomores. As you might guess, a high percentage indicates student satisfaction with the college/university, and students who return to the same college for sophomore year have a higher rate of graduating from that university. Attending a college or university with a high retention rate means an increased likelihood that you will GRADUATE WITH A DEGREE and not just drop out with the burden of 1-2 years of college debt.
3) Average salary for graduates - This number represents an average of the students’ self-reported salaries in a given graduation year. The average salary of a college’s graduates varies. One reason for a higher starting salary for graduates is that employers value the quality of the education those graduates received. Which brings me to another related, but slightly off topic word of advice - know the starting salary of the career your major is preparing you to enter. Some careers have beginning salaries in the $30K range, while others may have a beginning salary in the $100K range. It just makes sense not to take on more college debt than your future career can easily repay!
4) Percentage of students employed within 6 months of graduation – Your college loan payments enter repayment six months after you graduate. This means having a job within that time frame is something you should be thinking about pretty seriously. Colleges who report a high percentage of students being employed or moving on to graduate school within six months are assisting their students to successfully move on to their next step in life and career!
Considering ROI when building your college list is all about balance between these factors...the cheapest investment (nor the most expensive) won’t necessarily give you the highest return. Taking time to consider the cost of your education vs. expected outcomes is time well spent. I challenge you to get started early - the beginning of junior year in high school is ideal - to begin researching all the great options available and don’t forget to add colleges that offer a high return on your investment on your college list! Next Step College and Career Consulting can help you build a college list that includes colleges that offer a strong ROI!