How To Calculate The ROI Of Your College Degree

With ballooning tuition prices, growing student loan debt and many high school students increasingly considering alternatives like trade schools or bootcamps, many are asking – is a college degree worth the investment?

When Marlese Lessing, a writer on the Small Business Loans team at Bankrate, decided to pursue higher education, she “applied for pretty much every scholarship” that she could. While in school, she worked, moved out of the dorms in her junior and senior years to find cheaper housing and even put $20 a month towards her loans to graduate with the least amount of debt possible.

As Lessing’s experience shows, the answer depends on several factors, which can include your career goals, the cost of your education and your potential earnings after graduation. Some degrees still deliver strong financial returns while others might not justify the price tag – especially if loans are involved, irrespective of competitive lender rates.

How to calculate a college degree’s ROI

Return on investment (ROI) compares how much you spend on your degree to how much you earn. You likely won’t earn enough to offset the degree within one year, so let’s consider the potential return over 40 years, which assumes you graduated when you were 22 and you worked until 62.

A return above 100% means your degree paid for itself – and then some. Below 100%, you’re not breaking even within that timeframe.

ROI of college degree by major

For a more personalized calculation, consider the cost of interest you will pay over time if you take out student loans. This can minimize the amount of return you get on your degree.

Starting salaries vs. other factors for determining ROI

Starting salaries may be a good starting point in determining ROI, but other factors such as unemployment rate, work-life balance and anything else important to you in a career, may be important to consider.

Research also shows that many of the salary gaps narrow by mid-career across majors. According to data put out by the U.S. Census Bureau, political science majors made an average of $54,000 fresh out of college, which is below that of accounting majors ($60,000) and nursing students ($65,000). By mid-career, this figure rose to $90,000, which are above mid-career salaries for accounting ($88,000) and nursing ($84,000).

Case in point: Humanities majors can get competitive salaries

According to one Bankrate data analyst who asked to remain anonymous, a non-STEM major better prepared them for their career. Though they were an English and comparative literature major, they were confident in their own marketability because of the skills they developed “that other people in STEM typically don’t pay attention to.”

The most important, I would say, is the ability to pull back from the details and understand the bigger picture or business objective.

They were also “fairly confident that a position that accepted a more well-rounded degree would also have potential for a lot of career growth” despite knowing they might have to frame the degree as a soft skill to get a higher-end salary. Combined with the Python and data skills they developed as a side hobby, they were offered a competitive starting salary.

“Two years since graduating,” they said, “I make a little under two times what the average starting salary for my major is and above what the average starting salary for a STEM major might be.”

In-state vs. out-of-state schools: What to consider

Below is a breakdown of college tuition costs by institution type. On average, an in-state school is just over a third of the cost of public, four-year, out-of-state schools – even less than that compared to private, four-year schools.

While we are comparing sticker prices here, keep in mind that financial aid can significantly impact what you actually end up paying.

Key differences

Choosing between in-state and out-of-state schools isn’t just about tuition, though cost is a major factor. Other considerations can impact your success, well-being and ROI.

• Tuition: In-state public schools offer significant discounts for residents.
• Job prospects: It’s often easier to land a job near your alma mater, especially where alumni networks are strong.
• Support system: Studying closer to home can provide emotional and logistical support. It would also save on traveling costs for the holidays and breaks.

Estimating ROI if you attend a top college

Graduating from a prestigious school can boost your earnings – but it comes with a price. Ivy League and top-ranked private schools often charge the highest tuition but may also offer greater access to prestigious companies and organizations, especially in law and finance.

For example, Harvard University costs $59,320 per year in tuition for the 2025-2026 academic year, but graduates end up making a median income of $101,820 ten years from when they enrolled in college. Furthermore, Harvard has a graduation rate of 98 percent.

In contrast, Framingham State University, a public, four-year school also located in Massachusetts, costs just $12,220 annually. On the downside, it has a much lower graduation rate of 62 percent and graduates end up making a median salary of $52,350 ten years after enrolling.

On the flip side, while Harvard graduates make roughly two times the salary of Framingham graduates, the average Framingham State graduate is earning more than the cost of their degree within six years of graduating. According to these numbers, the Harvard graduate is earning less than half the cost of their college degree.

Keep in mind that the tuition may not reflect what you necessarily pay. For example, while Harvard University’s tuition is $59,320, students who receive aid end up actually paying a net price of $16,820 on average for their education. Scholarships, grants and aid can significantly lower the total cost.

Other factors that affect college ROI

The cost of your degree is an important factor in determining your ROI, but other factors can also impact your return:

• The current economy: If you graduate in an economic crisis, you may have more trouble finding a job and reaching your earning potential initially. This can lessen the return of your degree. Conversely, a healthy economy can help you get a higher return by offering more job opportunities.
• Length of time in school: Sometimes it takes longer to finish a degree than initially planned. Other times, you can graduate early. Obviously, taking longer means a higher cost for your education, while graduating early means the cost is lowered.
• Life decisions: Life is unpredictable and your plans can change. You may need to unexpectedly take time off from work or school. Or, you may decide you want to change careers. Life decisions like these can change the ROI for your degree, both negatively and positively.
• Personal values: If you have specific considerations that you find important in a job, such as work-life balance, underemployment or prestige, then these should factor into your ROI calculation. According to a BestColleges survey from 2024, work-life balance topped the list of what college students prioritized in their job search.
• School debt: Graduating with the least amount of debt possible, even from a less prestigious school, does give you more flexibility when you graduate instead of having to take a job out of desperation.

Stay flexible, informed and ready to adjust your plans to maximize your degree’s value.

Bottom line

College can still be a smart investment — only if you run the numbers. Research costs, understand loan implications and compare the expected earnings for your chosen field. Whether you attend a prestigious university or stay local, calculating your degree’s ROI helps ensure you’re making a financially sound decision.