The Worst Deals on College
There's no denying the fact that college tuition is rising and that education usually comes with some long-term debt. Among bachelor's degree recipients in the for-profit sector, the median total student debt of the 95 percent who borrowed was $32,700, according to the College Board.
What's worse is that degrees from some schools don't guarantee a good chance to pay back those loans. PayScale reviewed nearly 700 colleges and universities to calculate the return on investment (ROI) for tuition -- what you get back for what you spend -- and found that there are a number of schools that aren't worth the cost. That's despite recent findings by the Georgetown University Center on Education and the Workforce indicating that those holding a bachelor's degree earn 84 percent more than somebody who has high school degree.
Al Lee, director of quantitative analysis at PayScale, explains that though the main financial benefit of attending college is the gain in income, attending college means giving up the four to six years of income that you would earn by going straight to work after high school. For the PayScale survey, he says, "We calculate the gain in median pay over a high school graduate as the difference between the 30-year median pay for a 2010 bachelor's graduate and a weighted 34-to-36-year median pay for a high school graduate."
What's Your Major?
Lee adds, "A major has as large or larger impact on pay than the school. Part of the reason the schools at the bottom of the list are there is because they specialize in preparation for historically underpaid careers: social work, education, etc."
Indeed, last on the list is Shaw University, a private college in Raleigh, N.C., whose divinity school sends many graduates into the ministry. A 2010 graduate's cost to attend was over $98,000, but the average wage for a senior pastor tops out at less than half that, making the return on investment low.
The Cost of Leaving Home
Making a bad college choice may simply be a matter of attending a state school that's not in your home state -- even if you are dying to have the dorm experience. Lee notes, "Paying out-of-state tuition is rarely a smart move. Only a few flagship state university campuses and top-ranked public engineering universities make the top 100 for ROI when paying out-of-state tuition."
The worst offenders? Fayetteville State, University of Arkansas at Little Rock, Chicago State (CSU), and the University of North Carolina at Pembroke all cost more than $100,000 in 2010, yet they offered non-resident graduates less than 5 percent annual return on their tuition investment.
Ultimately, says Vadim Gordin, a patent attorney based in New Jersey, those considering any college track should ask themselves a simple question: Will this coursework make me a more valuable employee? "I went to law school with more than a few people that ended up needing a graduate degree to find a job, because their undergraduate education came down on the wrong side of the value equation," says Gordin.
Here are 10 schools with an ROI of less than $3,000 per year more in net earnings over high school grads:
|2010 4-Year Cost||30-Year Net ROI|
1. Shaw University
2. Davenport University
3. University of North Carolina at Pembrooke (UNCP)
4. Chicago State University
5. University of Arkansas - Little Rock (UALR)
6. Cameron University
7. Texas Southern University
8. Grambling State University
9. Lee University (Cleveland, Tenn.)
10. Fayetteville State University
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