“What’s Your College Degree Worth,” a Bloomberg Businessweek survey of 852 colleges and universities in the U.S. looking for the best return on investment (ROI), has highlighted NJIT as one of four undergraduate institutions of higher education in New Jersey that offers the best deal. Overall, NJIT ranks as number 81, in the top 10 percent of all colleges surveyed. Princeton University, Stevens Institute of Technology and the College of New Jersey were also named among New Jersey’s four best buys.
The study examined graduation rates, total cost to graduation, ROI as a percentage, 30-year-net return on investments and 30-year net return for graduates.
PayScale, which collects pay information from individuals using its online pay comparison tools, dug into its trove of 1.4 million reports on US college grads for the publications and put a price tag on college diplomas. With the typical college degree from the schools in this report, a graduate will earn about $1.95 million over a 30-year-career, netting about $670,000 more than a high school graduate. The survey aims to show that not all schools are equal.
The study used pay reports from 1.4 million graduates from U.S. colleges and universities supplied through online pay comparison tools in the past year. The study used pay reports from only full-time U.S. employees with bachelor’s degrees and no advanced degrees, and pay reports averaged about 1,000 for each of the 554 schools in the study. To calculate the 30-year net return on investment on a college degree from each school, PayScale first combined the median cash compensation (salary and bonus) for graduates for each of the past 30 years.
It then calculated the cost of the degree (excluding financial aid awards) by combining tuition and fees, room and board, and books and supplies for the number of years it takes most students to graduate from each school. From the compensation figure, it subtracted the cost of the degree and the estimated median pay for a hypothetical graduate for the same period plus an additional 4 to 6 years representing the time he or she would have spent in school.
The resulting figure, in 2010 dollars, incorporates the school's six-year graduation rate, so that a school where graduates have a net return of $2 million over 30 years and where the graduation rate is 50 percent will have an overall net return of $1 million. Annualized ROI includes annual wage inflation of 4.3 percent per year. Net return and annualized ROI for state schools were calculated twice, using college costs for in-state and out-of-state students, and are listed separately in the table. Data on school type, graduation rates, and total cost were supplied by the Integrated Postsecondary Education Data System.