More bang for your buck: Study: Investment in college education shows best regional returns at NDSU
FARGO — North Dakota State University students may be getting the best bang for their buck, according to a new report that calculates the return on investment at different colleges.
PayScale, a salary analysis site, used salary data from alumni to rank colleges and universities based on post-graduate earnings and the total cost to attend school. In North Dakota, NDSU came out on top with a 9.5 percent annual return on investment over 20 years.
Over 20 years of work, an NDSU graduate will net $405,300 after subtracting what he or she would have earned as a high school graduate and the cost of education. That’s the 20-year return on an initial $82,320 investment in a bachelor’s degree from NDSU.
If a student decided to forgo college and work straight out of high school and instead invested that tuition money in a U.S. Treasury bond for 20 years, the rate of return would only yield annual returns of 3.42 percent, according to PayScale.
Based on all of the North Dakota and Minnesota schools included in the report, a degree from a public school in either state is a better investment than a Treasury bond. In Minnesota, the University of Minnesota boasts a 9.1 percent rate of return for in-state students. Minnesota State University Moorhead has a 5 percent annual ROI. After in-state and out-of-state students at NDSU, in-state students at the University of North Dakota have the second-highest returns at 7.4 percent, or $262,700.
Jill Wilkey, director of NDSU’s career center, said the report substantiates what higher education officials in the state have been saying for years about a degree as an investment.
“We have always talked about the value of education at NDSU — and in North Dakota — in that it is a very cost-effective education,” she said.
Wilkey said the state’s strong economy also contributes to the value of an education in North Dakota because there are jobs and higher average salaries for graduates in the state.
Local private colleges, which have a higher cost of attendance than public schools, have lower returns. It costs $115,500 to attend the University of Jamestown, with a 3.4 percent rate of return on investment. A $153,200 degree from Concordia College in Moorhead, Minn., has a 2.3 annual ROI.
The particulars of the PayScale study are tough for a school like Concordia, said Steve Schuetz, vice president for enrollment, because so many students go on to graduate and professional school or service work.
The study excludes students who go on to earn other degrees in order to determine the value of a bachelor’s degree at each college.
Schuetz said students who want to attend Concordia are looking at other factors beyond earning potential and job placement after graduation. Students get long-term returns from their experience at Concordia as a faith-based school, giving back and engagement in the community. While those factors aren’t part of the PayScale report, Schuetz said they’re central to the school’s mission and the values of its students.
“The breadth and the depth of the experience they have here goes beyond the skills they will get to do a particular job,” he said.
While earnings are important and a college education will certainly boost someone’s lifetime earning potential, Sarah Miller, director of MSUM’s career center, said there are other benefits you can’t measure “in dollars and cents” such as fulfillment and engagement.
Experience in college can help young people find careers they are passionate about, even if they aren’t the most lucrative. MSUM, for example, graduates many students who go on to teach, Miller said.
“Their salaries might not necessarily be the highest. Educators don’t choose that profession because they are going to make millions of dollars,” she said.