The Best Colleges for Your Money
December 24, 2008
The best college for your money obviously depends on what you’re looking for in a school; but whether your college search is for you or your kid, the best college for your money often boils down to a basic cost/benefit analysis.
College Cost / Benefit Analysis
Free Money Finance has a great cost/benefit analysis for undergraduate and grad school; one of his more popular articles is how he made millions on a $5,000 investment.
His philosophy is to match the cost of the education with the earning potential upon graduation. This also ties into the degree that you choose. Many people choose degrees in subjects that interest them, but they fail to think about how to apply those degrees to a real-life career.
For example, if you spend $100,000 on a four year undergraduate degree to earn $30,000 a year. It will most likely take you 5, 10, or even 15 years to pay off your education. In comparison, if you spend $50,000 on a four year undergraduate degree to make $60,000 a year, then you’ll be able to pay back those student loans much faster.
College Cost Example
My wife is a great example of getting an education that pays off. She received her undergraduate degree in health sciences from the University of Florida and was about $9,000 in debt from it. Then, she did a two years master’s program to become a physician assistant through UF’s physician assistant program. Her starting salary was well over $70,000. She spent $40,000 to make double the investment.
Private College versus Public College
I am a strong proponent of public colleges in terms of the value of the education based on the cost. If your parents do not have a college savings fund for you, and you will be taking out student loans to pay for your undergraduate education, there is no financial reason to pay private college tuition.
In my opinion, the value of an undergraduate degrees is not based on which school it came from, it’s more about how YOU use the skills you learned while earning the degree. Graduate degrees on the other hand are a little different, prestige still seems to matter quite a bit. Here are some interesting facts taken from a salary report from payscale.com.
Dartmouth College graduates have the highest median salary in the country with a Total Cash Compensation of $134,000
Dartmouth is a private school, so they would be an exception to the rule that you may want to consider paying the high priced tuition with high earning potential.
The University of California Berkeley is the state school with the highest Median Total Cash Compensation of $112,000
Cal-Berkeley is one of the best public schools in terms of a cost/beneift approach.
Chemical Engineering is the most lucrative college major with a median Total Cash Compensation of $107,000
If you have the mind for this stuff, and it interests you, then by all means pursue it. But, don’t pick chemical engineering as your major just for the money. Engineering could be the most boring thing you ever do if you are not passionate about it.
Harvard College graduates frequently enter not for profit positions
This is an interesting one, and don’t think that working in a non-profit environment always means that you’re taking a pay cut.
Major state universities provide exceptional value, with median salaries of graduates in the top 5 in their states, just behind highly selective national universities and colleges (e.g., Rutgers in New Jersey, University of Texas, University of Washington, University of Virginia)
No surprise here. If you live in these states, and I would definitely throw Florida into the mix, consider state school first, because the education is just as good as their private schools at a much cheaper price.
Here are a few lists of the best colleges from Payscale, US News, and Forbes:
- PayScale’s Best Colleges (Party schools w/high earning potential)
- US News Best Colleges for 2009
- Forbes List of Best Colleges for 2008
Don’t take your decision for choosing a college lightly. I learned the hard way, and I chose a school that I could not afford my freshman year. I ended up coming back home a year and a half later and tons of debt. I got my act together, went the community college route, and ended up graduating from the University of Florida.
I accumulated $18,000 of debt in the first 18 months; and then only $4,000 over the next 3 years. Don’t make the mistake of going for prestige and small classroom size if you can’t afford it.
Attending college can certainly be one of the most life changing experiences of a young person’s life. Out on your own, it’s the first time you must depend on your personal responsibility skills.
It’s a time that can make or break your financial future so when looking for a college and choosing a college major, getting the best education possible at the best price possible should be one of your main goals.
All posts by Erik