Public Schools Are The Best Bet For A High ROI

college life

By Sean Leslie

Public university graduates, rejoice!

Sure, public school graduates may endure the occasional haughty raised eyebrow or sardonic smirk from private school alumni, but guess what? Turns out, as far as an investment in your future is concerned, public schools are—once again—the smart choice.

Year after year, in PayScale's College ROI Report, public schools dominate the overall ranking when we look at college like any other financial investment; in our 2017 report, of the top 100 schools ranked in order of the best annualized ROI, only five—five—are private institutions. The overwhelming majority of high ROI schools are public. And of those, even the 100th-ranked University of Wisconsin-Madison gives its grads a healthy 8.6 percent annualized return on their investment. That's getting close to half-a-million dollars over 20 years. And to put it in perspective, the S&P 500 only gave a 7.8 percent return on investment in the last two decades.

How do you like them apples?

Part of the size of that return is due to the relative low cost of a public education as compared to tuition at private schools. And it should be noted that these rankings don't include financial aid, which can make a big difference in the total cost of attending college. (Explore PayScale's full College ROI Report to find out how typical financial aid packages affect ROI at each school.) But that means you have to qualify for financial aid in the first place.

The main point here is, if you're measuring by ROI, attending a public school is a good bet for getting a solid return on your tuition investment.

Yes, there's more to a college education than the salary it'll help you make after you graduate. Of course. Colleges do more than just hand out diplomas; they teach students how to learn, and there's no price tag that can be placed on that life skill. And for many, college is where you develop a sense of self, and where you discover the passions that shape the rest of your life.

But with 43 million Americans owing some amount of student debt, ensuring you choose to earn your degree at a school that will provide a healthy return on your investment is becoming a more and more important criteria for college selection. And in general, public schools will give you the best bang for your buck.

At the other end of the scale, for-profit private schools have historically seen some of the worst ROIs on our list.

In a February, 2014 article, The New York Times referenced a number of lawsuits pending against private, for-profit colleges, noting, "Though they vary widely in quality, for-profit schools have drawn scrutiny in recent years for aggressive recruiting, high prices, low graduation rates and heavy borrowing by students who often have poor job prospects afterward." (In one recent decision reported by The Washington Post, a federal judge ordered for-profit Corinthian Colleges to pay $550 million to the Consumer Financial Protection Bureau, "resolving a year-long lawsuit against the for-profit chain for allegedly steering students into predatory loans.")

Combine these shady reputations with a poor return on investment, and you'd be wise to think carefully about attending a for-profit college. For these reasons, we've decided to remove for-profit private colleges from our rankings.

But if you graduated from a public institution, wear your public school's sweatshirt with even greater pride! Odds are, when it comes to the ROI on your college tuition, you have a leg up on the private competition.

Sean

About the Author
Sean Leslie is the Sr. Content Strategist at PayScale.com, and he writes for PayScale about work, salary, work-life balance, combining your passions with your career and whatever else catches his fancy. Sean’s a happy husband and father; an erstwhile runner, mountain biker, backpacker and outdoorsman; and—though English by birth—an adopted and fiercely proud Pacific Northwesterner.

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