How do you measure the value of a college degree? Does it really matter where you get yours from? According to a CNBC.com article, one way to measure that is NPV, or “net present value.” They use NPV to come up with the following list of the Top 10 colleges that pay off the most after 40 years.
What is NPV?
NPV is used by economists to measure how much an investment is worth adjusted for differences in the value of money over time due to inflation.
According to Dr. Anthony P. Carnevale, lead author and CEW director, “Everyone is asking, ‘Is college worth it?’ and we set out to try to find an answer. Not only will it help students, but this kind of information on the costs and benefits of higher education holds institutions more accountable.”
What metrics did they use for this report? They looked at NPV, NPV at 10, 15, 20, 30, and 40 years, Net Price, Type and Level of Institution, Earnings Price Return, Earnings-Debt Return, 7-Year Repayment Rate, Graduation Rate, as well as other table filters such as men and women-only institutions, minority-serving institutions, and Carnegie Classification.
The researchers found that cheaper college options paid off in the short term, however, more expensive degrees from private nonprofit colleges and universities paid off the most in the long run. They also found that the median NPV for all colleges 10 years after enrollment is $107,000. By 40 years after enrollment, the NPV is $723,000.
Top 10 Colleges That Pay Off The Most Over 40 Years
In the CNBC.com article, they have included 10 colleges where earning a bachelor’s degree pays off the most after 40 years, according to the Georgetown report. Here are the schools:
Type of school: Four-year private nonprofit 10-year NPV: $198,000 40-year NPV: $1,950,000
10. United States Merchant Marine Academy
Type of school: Four-year public 10-year NPV: $298,000 40-year NPV: $1,949,000
In the #1 spot is the Albany College of Pharmacy and Health Sciences. According to the report, this is because of relatively low attendance costs and the high earnings for alumni 40 years after enrollment. It is also important to note that 8 of the 10 schools listed are 4-year private nonprofit bachelor’s colleges and universities. The two public institutions are Maine Maritime Academy and the US Merchant Marine Academy.