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Two College Rankings That Calculate Return on Investment

Those familiar with college rankings resources know that the rankings issue of US News & World Report magazine, published in September of each year, is the most widely read and quoted source of not only rankings but other useful information on American colleges and universities. Although it’s perceived by some as the last word on the relative quality of American postsecondary education, it’s by no means the only source of such information or even necessarily the best.

The selection of an undergraduate college for a child is often the second largest financial decision that an American family confronts, with the purchase of a home being the only one larger. Total expenses for a 4-year bachelor’s degree at a public postsecondary institution now exceed $80,000 and their private counterparts cost over $180,000.

Two information resources, Money and Forbes magazines, consider the US News & World Reports, in its methodology, to be relying too heavily on measures of a school’s degree of admissions selectivity. Although this is certainly useful information, as a methodology it cedes too much weight to admissions process and not enough to educational outcomes, according to Money and Forbes. Hence, these two resources focus less on what the “best schools” are and more on whether a college provides value to students, that is, a sound return on investment.

Money and Forbes use similar criteria and weights to calculate their rankings. Unlike US News & World Reports, they mix colleges and universities, both public and private, on a single list. Money magazine ranks schools according to the following factors:

  1. Quality of education (1/3 weighting), which was calculated using:
    • Six-year graduation rate (30%)
    • Value-added graduation rate (30%)
    • Peer quality (10%)
    • Instructor quality (student-to-faculty ratio) (10%)
    • Financial condition of institution (20%).
  2. Affordability (1/3 weighting), which was calculated using:
    • Net price of a degree (30%)
    • Debt per student (20%)
    • Student loan repayment and default risk (15%)
    • Value-added student loan repayment measures (15%)
    • Affordability for low-income students (20%)
  3. Outcomes (1/3 weighting), which was calculated using:
    • Earnings of graduates (12.5%)
    • Earnings adjusted by major (15%)
    • College Scorecard 10-year earnings (10%)
    • Estimated market value of alumni’s average job skills (10%)
    • Value-added earnings (12.5%)
    • Job meaning (5%).
    • Socio-economic mobility index (20%)

The top 25 of the Money and Forbes rankings are compared side by side in the table below.

Table: Colleges and Universities with the Best Return on Investment in 2017

Rank Money Magazine Rank Forbes Magazine
1 Princeton University 1 UC Berkeley
2 CUNY Bernard Baruch College 2 UC Los Angeles
3 Michigan – Ann Arbor 3 Princeton University
4 UC Berkeley 4 University of Florida
5 UC Los Angeles (tie) 5 Harvard University
5 Stanford University (tie) 6 MIT
6 UC Irvine 7 Stanford University
7 MIT 8 UC Irvine
8 UC Davis 9 UC Davis
9 Harvard University 10 Brigham Young University
10 Virginia – Charlottesville 11 UC San Diego
11 Rice University 12 Duke University
12 Washington – Seattle 13 Yale University
13 Yale University 14 Rice University
14 Vanderbilt University 15 North Carolina – Chapel Hill
15 Washington & Lee University 16 Amherst College
16 Georgia Tech – Atlanta 17 Cornell University
17 University of Florida 18 Dartmouth College
18 Cal Tech 19 Cal Tech
19 Maryland – College Park 20 Virginia – Charlottesville
20 Columbia University 21 Georgetown University
21 Illinois – Urbana-Champaign 22 UC Santa Barbara
22 Virginia Tech 23 Brown University
23 Rutgers University 24 Vanderbilt University
24 Williams College 25 Wellesley College
25 University of Pennsylvania 26 Williams College

 Students and parents should understand that all ranking methodologies have limitations. You should use college rankings only as general guides or quick reference sources, not as your sole resource in making a college selection decision.

Your IvySelect college admissions counselor will help you develop your targeted college list based on a nuanced understanding of the schools that best fit your needs, talents, interests, and career aspirations. IvySelect provides expert guidance during all stages of the admissions process and is especially proficient in the development of your best application for each targeted school.

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