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For years parents have turned to the rankings of popular magazines like theU.S. News and World Report or Forbes to help them choose the best school fortheir child. While I would argue that a magazine’s rank list is notusually the best tool for making your final decision, it can be helpful asan overview of what each school has to offer.

This year, Bloomburg Businessweek and PayScale have unveiled an improvedversion of their new ranking system: listing schools by their return oninvestment (ROI).

College as an Investment

Most students and their families are willing to make financial sacrificesfor a college degree because they feel that college is an investment worth making.With that thought in mind, Bloomburg Businessweek’s report took a look at theschools that give their students the best return based on the cost ofattendance and their pay scale after graduation.

The 2011 top twenty colleges based on ROI over 30 yearsare:

The California Institute of Technology Harvey Mudd College The MassachusettsInstitute of Technology Princeton University Stanford University DartmouthCollege Duke University Harvard University University of PennsylvaniaUniversity of Notre Dame Babson College Yale University Columbia UniversityLehigh University Amherst College Colgate University Worcester PolytechnicInsitute University of California, Berkeley Cornell University RensselaerPolytechnic Institute

The first three of these schools gave their graduates an estimated ROI inexcess of .5 million over 30 years.

One the other hand, the PayScale study showed one college–the College of theOzarks in Missouri–whose graduates actually earned 3,000 less over 15 yearsthan typical high school graduates!

Methodology

You may find this list interesting to use as a comparison tool, but youmight wonder how each school earned their rank on the list. The methodologyused was fairly straightforward:

For the college price portion, the study looked at totalcollege cost (tuition, room and board, supplies, etc.) as well as how that costmight be reduced by typical amounts of grants-in-aid at each school. Theymultiplied that cost of attendance by the average number of years a 2010graduate took to graduate from each school. For the earningsportion of the ranking, PayScale used approximately 1,000 pay reportsper school from alumni who graduated between 1981 and 2010. Graduationrates for each school also came into play, as funds spent at a collegefrom which a student did not graduate would decrease the average ROI for thatschool.

All in all, this study adds a nice twist on the traditional college rankingmeasures. This study provides a different frame of reference for collegecomparisons by analyzing, in hard dollars, the benefits of earning a collegedegree from various colleges. It sure sure beats just focusing on a college’ssticker price,doesn’t it?

All the best,Deborah Fox

Deborah Fox is the founder of Fox CollegeFunding®, a nationwide company that helps families findcreative ways to reduce their college costs.

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