There's no one answer to whether or not investing is a better use of your money than paying for college, as it can vary depending on the degrees and benchmark investments in question. Generally speak, college graduates make more on average than those with less education, which means they also have more money to invest in the long run. Meanwhile, investors are more vulnerable to stock market volatility, and those without college degrees may struggle to bounce back in the event of a market collapse.

One of the ways to figure out if a degree is worth the money is to calculate its return on investment (ROI). Thജe ROI is a metric that measures the effectiveness of the return on an investment but also compares it to other investments during a similar time period. In this article, we look at the ROI for college degrees based on a few different factors and compare them to other investments.

The Best Schools for Return on Investment

The 澳洲幸运5官方开奖结果体彩网:value of a college degree can be hard to quantify. In addition to the tangible value of your future income, there are many intangible benefits, including learning, independence, improved social skills, and developing other skills such as teamwork and discipline. Because intangible skills can't be quantified into a dollar amount, we must examine the numbers that can be quantifi🔴ed to determine the ROI of an education.

According to the most recent Payscale study, not all degrees and colleges are created equally. The study, last updated in 2024, looked at nearly 2,000 schools across the country. All calculations noted from the study for the purpose of this article assume the option of on-campus housing and no 澳洲幸运5官方开奖结果体彩网:financial aid.

Colleges With the Highest ROI Percentages

If we look at the ROI of specific universities, a college degree looks like a compelling 澳洲幸运5官方开奖结果体彩网:investment. The United States Merchant Marine Academy's Service Academy ranked at the top with the best 20-year ROI at more tha🌳n 22%ಞ and with the total cost of a four-year degree coming in at $24,500.

Brigham Young University-Idaho and SUNY Maritime College's in-state program rounded out the top three with ROIs of 14% and 13%, respectively. However, the four-year cost of tuition for SUNY Maritime College was $111,000 versus $51,500 for Brigham Young University-Idaho.

Colleges With the Highest Income Earned

If we instead look at the total income earned by graduates minus the cost of education, the results are a bit different. Harvey ℱMudd College and the Massachusetts Institute of Technology (MIT) come in first for the total amount of income earned after 💎20 years, at $1.43 million and $1.38 million, respectively. The U.S. Merchant Marine Academy also ranks high, claiming the third spot with a 20-year net return of $1.35 million.

The U.S. Military Academy came in fourth with a $1.31 million return, and the U.S. Naval Academy ranked #5 with $1.25 million. Meanwhile, Brigham Young University-Idaho ended up in 147th place with only $632,000 earned over 20 years. Other schools, including Ivy League heavyweights Harvard and Yale, didn't reach the top spots thanks to their higher costs of attendance (COAs).

The Best Majors for Return on Investment

Of course, looking at the ROI of a college degree by school has some flaws. An art major has very different career prospects from an engineering major. Let's take a look at how various majors factor into the ROI.

According to the National Association of Colleges and Employers (NACE), the undergraduate majors with highest starting salaries (broadly defined) in the U.S. for 2024 are:

• Engineering - $76,736
• Computer Science - $74,778
• Math and Sciences - $66,760
• Social Sciences - $69,802
• Humanities - $68,227
• Business - $63,907
• Communications - $62,205
• Agriculture and Natural Resources - $61,399

Benchmark Investments

The safest investment in general for most 澳洲幸运5官方开奖结果体彩网:retail investors is a U.S. 澳洲幸运5官方开奖结果体彩网:Treasury bond. Because these investments are so safe, the return paid by the U.S. government is very low. Over the last 20 years, this would have resulted in a ROI of approximately 3% (through the end of 2024). Compared to the average college degre♋e, an education would likely serve you much better.

Some stellar investments have beat the ROI of a college degree several times over. For example, an investment in Apple (AAPL) stock in the year 2002 would've returned around 30,000% after 20 years, while Microsoft (MSFT) would've returned 820%.

The benchmark for the market return is the 澳洲幸运5官方开奖结果体彩网:S&P 500 index. Over the same period, the S&🧸;P 500 returned 325%—higher than the average degree, b✤ut far from matching the ROI from the top degrees at the best schools.

However, college degree holders earn far more, on average, than those with less education (and those with MAs or PhDs make even more). Additionally, if you earn more from your work, you can invest more over time. If the stock market collapses, an educated investor🐓 has a far g𓄧reater chance of remaining employed or finding a new job.

Understand Your Personal ROI on a College Degree🎃

No college experience or career is exactly the same, so your best bet is to estimate your own ROI based on the school and degree of your choice. However, that number wouldn't tell my whole story.

After earning a bachelor’s degree at CU, I went on to earn an MBA from the University of Denver. That private school's MBA cost about 33% more than my in-state cost of attendance at CU. While some people might argue that I had a better use for $90,000, I was debt-free two years later, and my income has had several large jumps, which I attribute to my MBA.

Right after I graduated from my MBA program, I found a new job that never would've happened without the 澳洲幸运5官方开奖结果体彩网:networking I did at school. It brought me a modest $5,000 raise, but over 20 years that covers m༺y entire COA plus an extra $10,000. Any raise over that further increases my ROI. Three years later, I received a 40% raise when I accepted a job—one that I wouldn't have been qualified for without the MBA. If I remain at my current salary and never get another raise, that's an 889% ROI on my MBA.

Of cou🐎rse, m🌃y results are better than some and worse than others. Your results may vary.

The Bottom Line

While we all want to be like 澳洲幸运5官方开奖结果体彩网:Warren Buffet and beat the S&P for nearly our entire career, Buffett isn't the average investoওr. You can safely invest in the S&P 500 and bring in a💦 steady return, but your growth potential is fairly limited.

If you're like most people, your career is going to be your primary source of income for most of your life. A college degree increases your earning potential and lowers the risk of unemployment—both valuable factors to consider when weighing a college degree against a market investment.

If you’ve made it this far, you likely understand that all degrees aren't created equal. If you go to a quality school and earn an engineering, computer science, math and science, or business degree, you'll likely beat the market. And, if you work hard and do a good job, your income should hopefully continue to grow. A college degree may not beat the market on its own, but coupled with hard work, your ROI has unlimited potential.