RALEIGH — College tuition is steep and getting steeper, leaving students and their parents questioning where and how they spend their money and what schools have the best return on investment.
A new study produced by the Georgetown Center on Education and the Workforce examines the returns on different degrees. The study, titled “A First Try at ROI: Ranking 4,500 Colleges,” says that 40 years after enrollment, a bachelor’s degree from a private college has a higher return, on average, than one from a public college.
The report also says community colleges and many certificate programs have the highest returns in the short term — 10 years after enrollment. Bachelor’s degrees from four-year schools eventually catch up and overtake most two-year credentials.
GCEW reviewed and analyzed the College Scorecard, an Obama administration project rolled out in 2013. Variables considered included net present value of the degree, the level and type of institution, graduation rates, debt rates and seven-year repayment rates.
What the researchers found was a $107,000 median NPV for all colleges 10-years out from first enrollment. By the 40-year mark, the NPV had reached an average of around $723,000.
The study’s ROI rankings page includes a customizable search of colleges by state, type of institution and degree. Each profile includes the NPV at five and 10-year increments over a 40-year timeframe.
Of North Carolina’s private colleges and universities included in the list, Duke University ranks No. 1 in the state overall and No. 24 nationwide, with a 40-year NPV of $1,754,000. Duke’s tuition per year is around $36,000. The top three four-year degree institutions in N.C. were all private with Wake Forest University and Davidson College following Duke.
Private for-profit two-year trade schools in the beauty industry landed at the bottom of the list, followed by both two and four-year for-profit community colleges.
When filtering for bachelor’s level degrees at public four-year universities in N.C., UNC Chapel Hill ranked first, with a 40-year NPV of $1,185,000. N.C. State was a close second at $1,113,000.
When it came to community colleges and private certificate schools, North Carolina doesn’t seem to fit the private over public institution ROI findings of the study.
Wake Tech ranks top of the list for two-year public certificate schools, followed by and Durham Tech and Pitt community colleges. Wake Tech’s median 10-year earnings for a two-year certificate program comes in at $31,000 with a 40-year NPV of $726,000. The average cost to attend Wake Tech is roughly $11,000.
By comparison, the top private two-year certificate schools came in around $200,000 less in their 40-year NVP rank. Brightwood College in Charlotte was ranked first in that category but had a 10-year median income of $23,900 and an NPV of $510,000. Brightwood’s tuition runs just over $16,400.
The value of the degree depends on the area of study one seeks. It is also tied to market demand, graduation rates, the level of employment saturation of a given field, emerging fields and economic factors.
The results of the Georgetown study show not much difference in rankings among schools in the mid-ranges, and that data is most useful for students to use to research the schools relevant to their interests.