Princeton University ranks #1 in a new analysis of the economic returns students receive from attending college, but public universities also perform well in the new ranking, claiming more than half of the top 25 places.
The rankings just released are the work of DegreeChoices, a relatively new company that provides students, families and consumers with information about their education and career options. (Full Disclosure: I serve as a webpage content consultant for DegreeChoices.)
Using publicly available data sources — most notably the U.S. Department of Education’s College Scorecard and the Integrated Postsecondary Education Data System (IPEDS) — DegreeChoices researchers ranked more than 2,000 undergraduate colleges and universities based on the mathematical combination of two Results.
The first is payback period – a measure of how long it takes students to recoup their education investment after attending a particular school. The second is earningsplus, a calculation of how much more or less students from a particular university earn compared to the weighted average of students from all colleges in that state.
Payback is essentially the same metric used by Third Way in college scoring, which is understandable given that Michael Itzkowitz, a senior education associate at Third Way who developed its payback method, served as an advisor to DegreeChoices for its ranking system.
Payback is calculated by dividing the amount a student pays out of pocket to attend a particular institution by the average salary increase they receive. The salary increase is determined by comparing the average salaries of the college students with the average salaries of peers with only a high school diploma in the state where the college is located.
Dividing the net cost by the premium earned by college students versus high school graduates shows the number of years it takes students to recoup the net cost of their education.
Incomeplus calculates the difference in median earnings for students at a particular university by subtracting the state’s weighted average earnings from the school’s median earnings.
To arrive at what is called an institution economic score, the factor by which DegreeChoices ranked schools, the school’s payback period is divided by the percentage benefit/disadvantage of being earningsplus factor.
Here is an illustration. The payback period for a student at California State University – Fullerton is 1.37 years. For a student at the University of California, Los Angeles, that’s 1.49 years. Cal State looks slightly better because the payback period is shorter.
But wait. Compared to the median income of all students ten years after attending a California university ($50,770), Cal State students earn an average of $54,586, 107.5% of the state average, while UCLA students earn $73,744, or 145, 3% of the state average. Now, the long-term picture provided by those earnings looks more favorable to UCLA. Dividing Cal State’s payback period by 1.075 yields an economic score of 1.27; dividing UCLA’s payback period of 1.49 by 1.453 gives an economic score of 1.02.
Whether it’s payback time or profitplus more important, depends on individual circumstances. Payback shows how quickly education costs can be recovered on average, while incomeplus brings relative economic benefits later on.
Remember that schools that earn more than 100% of the state average get an economic score lower than their payback period. And in this classification system, the lower the economic score, the better.
The 25 Best National Universities
Here are the top 25 national universities, ranked by their economic score. In addition, each listing displays the admission rate, graduation rate, net cost, payback period, average earnings, and earningsplus.
- Princeton University .31
- Stanford University .36
- CUNY City College .39
- University of Florida .45
- Georgia Institute of Technology .49
- Massachusetts Institute of Technology .50
- California Institute of Technology .52
- University of Michigan .70
- Duke University .70
- University of Pennsylvania .71
- University of California, Berkeley .74
- Missouri University Science and Technology .74
- Vanderbilt University .75
- Rice University .77
- George Town University .82
- University of California, Los Angeles .83
- University of California, San Diego .85
- University of North Carolina, Chapel Hill .86
- University of Washington .88
- Harvard University .89
- University of Virginia .89
- University of Illinois, Urbana–Champaign .90
- International University of Florida .91
- University of Columbia .91
- Yale University .91
What is remarkable about this top 25 list is that it includes 13 public universities, far exceeding the number that other popular rankings make, such as American news (four public universities in the top 25), Wall Street Journal/Times Higher Education(only one public school in the top 25) or TBEN (six public institutions in the top 25).
DegreeChoices uses the same method to rank:
Colleges of liberal arts (The top three are: Claremont McKenna College, Harvey Mudd College, and Washington and Lee College)
Latin American Institutions (top three: CUNY Lehman College, CUNY City College, and CUNY Hunter College)
Historically Black Colleges and Universitiess (top three: Elizabeth City State University, Fayetteville State University, Xavier University of Louisiana)
Women’s Colleges (top three: Texas Woman’s College, Barnard College, Mount Saint Mary’s University)
For-profit institutions (top three: Columbia Southern University, West Coast University-Dallas, Neumont College of Computer Science)
Consumer interest in how much economic return on investment a college degree provides remains strong, and several methods are now available to calculate that return. That’s in no small part due to concerns about the high cost of a college education, the resulting debts many students and their families have to bear, and the fact that most students say getting a good job is their job. main motivation is to go to university.
David Levy, who developed the DegreeChoices methodology, said his goal was to put the data on the economic outcomes of attending different colleges “into a user-friendly format so that students can quickly compare performance metrics between their target schools. gap in the current university rankings, and addressing this gap is becoming increasingly important as education costs skyrocket.”
Economic advantage isn’t the only reason to get a college degree, and it’s not the only measure of what makes a good college. But in an era when financial considerations have become so important to student decision-making, the DegreeChoices economic score provides a particularly comprehensive comparison of the economic returns of national universities and colleges.