College ROI Calculator: How to Determine Your Degree’s Return on Investment



Return on investment (ROI) is a fancy term for “getting what you pay for.” While this concept is well known in the business world, it’s useful to apply the concept to any large investment, including college.

Calculating the ROI for your degree means asking yourself: “Is a BA in Elementary Education from a well-known private school worth the $150,000 I’m spending on it?”

Alice didn’t ask herself that question. That expensive private school was her dream, so she enrolled fresh out of high school (borrowing more than she knew she should in loans to do so). Upon graduating, she was hired as a 4th-grade teacher at a public school, making just over $37,400 a year.

This number would have seemed like a fortune to Alice, as an 18-year-old fresh out of high school. Now that she’s been living on her own for a few years, and does all her own grocery shopping, let’s just say she understands why teachers are often unhappy with their salaries.

After taxes and the regular costs of living, Alice is lucky to have $600 of discretionary income left over each month. She would love to tuck part of that away in a savings account and use the other for going out, Christmas gifts, car repairs, and so on. But how big are those monthly student loan payments again?

Alice failed to calculate the ROI on her teaching degree before it was too late. Had she done so, she may have realized that spending $150,000 to pursue a profession that pays a $30,000 annual salary wasn’t the best use of her hard-earned dollars.

If you want to actually afford things once you graduate college, rather than throwing money into what feels like a never-ending black hole of debt, start by calculating your degree’s real-life value.

What’s ROI?

Simply stated, ROI means “return on investment,” and understanding your college degree’s return on investment is important. Why? Because it can help you understand whether enrolling in X major at Y school makes sound financial sense.

Calculating return on investment is as simple as researching how much money your desired career is likely to bring in, and deciding for yourself how much you’re willing to spend preparing for it. But, since lists are such nice, helpful things, let’s walk through the process step by step.

1. Evaluate whether a degree is even needed.

I know this will sound shocking, so take a deep breath. Not everyone needs a degree.

I know this goes against every brochure you’ve received in the mail, but it’s true. For some reason, modern society thinks “educated” and “credentialed” mean the same thing. They don’t. There are millions of jobs in the United States that don’t require any kind of higher education. Many of them pay really well, and any one of them can provide a sense of accomplishment and satisfaction if it’s a good vocational fit for you.

Alternatively, there are some professional degrees (for example, in cinematography) that may be better pursued outside of a classroom. If you want to learn how to make a movie, don’t spend your time consuming outdated material and using outdated technology. Buy a camera and start filming. Intern or volunteer on movie sets and at film festivals. Connect with people who are making movies and learn from them.

If you think a career like this (one that doesn’t require a college education) may be your path, skip the degree for now. Save thousands of dollars and invest your time and money by launching your career instead!

Skipping the classroom is a relatively low-risk way for you to explore whatever opportunity you think is most satisfying, especially if you’re young and single. And if you find out that career option isn’t actually a good fit, college will still be there.

2. Research the starting salaries of careers.

If the career path you’re interested in would benefit from a college degree, start digging into the numbers. What kind of money will this career actually earn? and are both great places to research this.

These websites give you an estimation of how much money various jobs earn. And they don’t just give you median estimates, but beginning and advanced earnings estimates too. There are plenty of resources like these on the internet, so log on and learn what you can.

Thinking of going into a profession that doesn’t churn out a lot of money? Don’t let that hold you back. That’s why you’re doing this exercise in the first place. Just use that data to inform your college spending (i.e., keep your college costs as low as possible). It’s a lot easier to get into a low-income profession that you’re passionate about if you’re not weighed down by student loan payments.

3. Compare your starting salary to your college costs.

Once you know what career you want to pursue and its approximate starting salary, it’s time to find an affordable way to get there.

Start by deciding how much money you’re willing to spend on your education. Considering how much she brought home upon graduation, Alice probably should have spent closer to $40,000 for her degree, not $150,000. Not only will a $40,000 degree require far smaller student loan payments upon graduation—good if she’s only making $30k—but she’s also much more likely to be able to afford $40,000 (paid over four years) without incurring debt in the first place.

I know you were probably hoping for an exact formula or a “magic number,” but the harsh truth is: There isn’t one. No one can tell you what your education is worth to you. And no one besides you knows what you can really afford.

The purpose of this exercise is to open your eyes to the big picture so you don’t end up like Alice, taking on mile-high student loans you will have no hope of ever paying off through your salary.

4. Find the most affordable way to earn your degree.

Fortunately, comparing the return on investment of college isn’t simply an exercise in reading labels. You have a lot more control over your college costs than you may realize.

The United States is home to over 5,000 colleges, offering very similar degrees at a wide variety of price points. It’s likely with a little research, you can find exactly the degree you want at exactly the price you’re willing to pay.

Granted, sorting through 5,000 schools by hand can be a pain (especially when many offer over 100 degree choices), so here are some basic tips.

  • Public schools are almost always cheaper than private schools

  • In-state tuition is almost always cheaper than out-of-state

  • General degrees (such as English, communication, general management) are almost always cheaper (and more useful) than highly specialized choices

  • Transfer credit is almost always cheaper than earning credit on campus

Take time to compare school prices, especially those of the smaller schools you may have overlooked. Don’t just blindly enroll in your parent’s alma mater.

Is a Degree Worth It?

Going to college is expensive. How expensive depends on a variety of factors, such as whether you’re an in-state or out-of-state student, or if you attend a public or private university. Things like switching majors, losing credits due to transferring schools, and taking extra time to complete your education can all impact how much you’ll spend on your degree. On average, most college graduates amass more than $30,000 in student loan debt.

At this point, you may be wondering if the time and money you’ll spend attending college is even worth it—because, as we mentioned earlier, there are some career paths that don’t require a degree (i.e., electrician, steelworker, executive assistant, etc.)  But the answer as to whether college degrees have a measurable ROI, is a resounding “yes.”

For example, May 2019 data from the U.S. Bureau of Labor Statistics (BLS) notes that as workers’ education level rises, their earnings increase and their unemployment rates decrease. It’s also worth noting that a 2019 survey by higher education website Ellucian, which polled 500 recruiting/hiring managers, found that 100% of respondents believe candidates with a college degree have more skills than non-degreed candidates.

The bottom line is this: If you plan on pursuing a career where a degree is needed, then yes, going to college is absolutely worth the expense. 

College and Planning for Debt

Sooner or later, all this pre-college financial planning begs the question: “How much debt is worth it?”

College should be an exciting opportunity that propels you into your future in a reasonable timeframe! It shouldn’t be a debt sentence. That’s why we here at Accelerated Pathways work so hard to help our students lower the cost of college and graduate 100% debt free.

So, as you’re performing this research, looking for a way to get the best ROI on your college degree, don’t be fooled into asking “How much debt is worth it?” Instead ask, “How can I graduate debt free?”

Keep your eyes open for every way to save money on your degree. Live at home. Work during college. Take transfer credit so you can pay for one class at a time. There are nearly endless ways to make college more affordable. You may need to put in a little extra effort to find them, but isn’t a debt-free future worth it?

If you want to save on college, talk to us! We make it our mission to help you graduate from the college of your choice entirely debt free.


A former student counselor and Accelerated Pathways student, Abigail is now a writer and Accelerated Pathways Content Manger who's passionate about empowering others to achieve their goals. When she’s not hard at work, you can find her reading, baking cupcakes, or singing Broadway songs. Loudly.