The New College Math: Calculating ROI/h1>
Math is hard. Especially when you’re a parent of a high school senior looking down the barrel of a six-figure college tuition. Is it any wonder the new favorite phrase in higher ed is Return on Investment?
By Ian Frisch | May 4, 2025
One evening in late 2022, Adam Latif, a high school student in Tampa, sat down at his computer to see if he had been accepted by Harvard University. He had toured the school’s grounds with his parents earlier that year as part of a larger college jaunt around New England, and he immediately fell in love. The prestige, the history…Boston! Harvard became his first choice. And yet he was expecting to get rejected. The school’s acceptance rate was the lowest it had ever been—dropping from 6.2 percent for the class of 2015 to 3.5 percent for the class of 2027—and the tuition had risen by 40 percent over the same period, making financial affordability as remote as the odds of being accepted.
Latif applied early decision, leaving him ample time to submit regular applications to other Ivies (Princeton, Brown, Yale, Columbia) in case he got turned down. But when he opened the link in his email, “the confetti thing came up on my screen,” he says. He had been accepted. He let his future come into focus over the next hour before telling his parents. They were ecstatic. Latif immediately thought of all the preprofessional clubs he hoped to join; he knew he would need to make sure his professional accomplishments offset the cost of Harvard’s tuition. “There is an implicit understanding that I have to make the most of my time at Harvard,” he says. “My parents are paying a lot for me to go there.”
The Rise of ROI
It’s no surprise that someone who had just been accepted by a college—even Harvard—would think about money. According to the Education Data Initiative, the average annual cost of a private four-year university is $38,000—an increase of 181.3 percent over the past two decades, triple the rate of inflation. And many mid- and top-tier schools cost much more. Full price tuition with housing at Vanderbilt University, for example, will now cost some students $100,000 per year. (Harvard lists its annual cost at $82,866.) These price increases have helped catapult the total amount of outstanding student loan debt in the United States to roughly $1.78 trillion. They have also led to a steady decline in confidence in college’s core promise: According to a report by Public Agenda and USA Today, only half of Americans believe that the economic benefits of higher education outweigh the costs.
This shift in opinion has been amplified in recent news headlines and on social media, despite the fact that data shows that those with a college degree still see higher lifetime earnings than those without and that college provides all sorts of advantages that are hard to factor into a conversation about tuition costs, including social and professional network development, emotional growth, and the fostering of lifelong passions. Thrust among these squishy variables, however, a more complicated calculation has, over the past few years, reached a fever pitch: Return on investment (ROI), where the college planning process—from which school to attend to what major to choose to what professional sector to pursue—is carefully considered against potential future earnings to justify the cost. Included in this reckoning are the pre-tuition expenses that many families now incur by hiring college admissions coaches, paying for expensive sports and summer programs, and enrolling in extracurricular academic activities that might give an applicant an edge.
ROI in higher education has always been a complex equation, one that’s difficult to calculate. Two decades ago the discussion around future earning potential, especially for people applying to the top 50 or so schools, typically focused on areas of study—pre-med versus English lit, say—rather than choice of school. Today ROI has become a core consideration for almost all applicants, who find themselves asking: Is choosing the highest-ranked school the way to go? Or is it better for students to find success by going to the best school for themselves and their vision for the future?
Adding to the complication is a steady stream of new studies and surveys published by academic institutions and think thanks that point out the harsh reality that a large percentage of college degrees don’t produce high enough future earnings to offset the cost. According to the Foundation for Research on Equal Opportunity, a self-described nonpartisan think tank, 23 percent of bachelor’s degree programs have negative ROI, and only 6 percent of degrees have an expected value of more than $1 million in lifetime earnings. The Center on Education and the Workforce at Georgetown University analyzed data from 30 percent of America’s colleges and found that more than half of students earn less 10 years after enrollment than someone with only a high school diploma. Some program-to-program comparisons are especially striking. Never mind the high-profile alums, most graduates of NYU’s elite film program will, on average, make less than someone who, forgoing college altogether, pursues a trade, such as plumbing or electrical.
Applied Economics
Meanwhile, as tuition continues to rise and the cost of living for recent graduates skyrockets, high-paying career opportunities have become more concentrated in budding technologies, and generalized degrees have become less applicable in the job market. Factoring ROI into the college conversation has started to trickle up the income stream, making even high-earning families cognizant of college’s cost and the financial stakes embedded therein. “If you’re in the 0.1 percent, your kid will be fine no matter what,” says Jayson Weingarten, senior admissions consultant at Ivy Coach. “We are really talking about upper-middle-class families. Those parents have had to work hard for their life, and they don’t want to see it go down the drain.”
What was once an exercise in merely making sure a child got into a good school has morphed into a winner-take-all value proposition where potential career earnings or admission into a highly selective Ivy League university has begun to outweigh college’s core philosophical promises of personal growth, worldly exploration, peer integration, and emotional maturity. And yet Weingarten stresses that “happy students will have more fulfilling lives. It’s about balancing all of these competing factors.”
The current conversation regarding higher education’s ROI has its roots not only in America’s ongoing college affordability crisis but in the economics of higher education as a whole. The relative ease with which families could borrow money for college, coupled with the “college at any cost” mindset that gained traction in the 2000s, created a feedback loop across universities and sent costs through the roof. To lure students, colleges boosted on-campus offerings, with an average spending increase of 38 percent over the past two decades, according to a recent Wall Street Journal report. This spending, in turn, translated into higher tuitions, which put more pressure on families to take out loans. As a result, the total amount of student debt has more than tripled since 2006.
But wages for recent graduates haven’t kept up with the cost of education. According to a study by the Burning Glass Institute and the Strada Institute for the Future of Work (both of which advocate for data-driven insights into the labor and education markets), 52 percent of graduates are underemployed a year after graduation, and 10 years down the road 45 percent are still underemployed, “working in jobs that do not require a degree or make meaningful use of college-level skills,” they wrote.
Over time a delta has formed between schools that provide positive ROI and ones that do not. “A massive bifurcation in terms of value proposition in higher education has revealed itself,” says Thomas Howell, founder of Forum Education, a private tutoring firm. Hafeez Lakhani, founder and president of Lakhani Coaching, an admissions advisory practice, adds, “It has never been harder to get into the top 50 universities. People have really caught on: Any college isn’t enough. You have to get into an even better school, because college is so expensive, and the ROI after school has to be there.”
It goes without saying that plenty of people find success without attending an Ivy League school, and many find greater value within their specific circumstances. Texan Monica Mehta, for example, was thrilled when her son decided to enroll at Texas A&M—the alma mater of many successful regional business leaders. In her eyes, having her son stay in the South was more valuable than attending a Ivy. “There are so many companies in Texas that hire Aggies primarily,” Mehta says, using the nickname of Texas A&M grads. “The ecosystem here, through these schools, is robust. That was very appealing to us.”
And yet many regions of the United States do not share this sense of local loyalty. As ROI becomes more embedded in the college planning process, an Ivy League school is still seen by many as the most reliable way to mitigate financial risk and set a child up for a successful career. This mentality, however, creates an inverse relationship between awareness of ROI and the odds of students being able to maximize it. This has been a boon for the top 25 schools in the country (and private admissions counselors, including the ones quoted in this article). As families think more about ROI, once popular mid-tier private colleges are falling out of favor, which makes the competition for more prestigious schools rise. “Fewer and fewer students [I work with] are putting safety schools on their list,” says Christopher Rim, founder of Command Education. He adds that he is increasingly seeing an Ivy-or-bust mentality among the clientele of his admissions counseling firm. “The parents say, ‘If we don’t get into a top 25 school, my kid will take a gap year and then reapply.’ ”
What students want to study has also made the college admissions process more competitive and complex. According to the American Academy of Arts and Sciences, between 2012 and 2022 the number of humanities bachelor’s degrees conferred fell 24 percent. “It’s no secret which departments lead to moneymaking prospects: computer science, data science, pre-med, economics, business,” Lakhani says. “These majors are bursting within certain universities, so it’s even harder to get into these schools, not to mention their top-tier majors.” To make matters worse, he adds, “We’ve seen severe obstacles for students hoping to switch into the more coveted majors at top-tier state universities.”
Bargain Hunting
Increasingly, admissions counselors are pointing their clients to programs that provide a value proposition without a cutthroat, highly selective admissions process. “Arizona State is one of the top colleges for innovation and entrepreneurship in the country,” says Howell. And yet “a prospective student may not think about Arizona State but rather Stanford or MIT.” Other programs Howell believes fly under the radar are: Baruch College (finance), Missouri University of Science and Technology (mining and petroleum engineering), University of Texas at Dallas (artificial intelligence), Texas Woman’s University (nursing), and Embry-Riddle Aeronautical University (aerospace and aviation). According to Georgetown’s Center on Education and the Workforce, the program with the highest ROI in the country isn’t swaddled within the protective confines of an Ivy; it’s Albany College of Pharmacy and Health Services, where grads’ net earnings over 40 years post-graduation average more than $2.7 million. Harvard’s value over the same time span? $1.9 million.
Still, capturing this type of career-specific, under-the-radar ROI—rather than broad-spectrum ROI promised by elite schools, regardless of major—requires a prospective student to think differently about higher education. “We know 50 percent of Americans don’t use the degree they have,” says Kristin Clark, a private admissions counselor. “The idea of thinking career-forward is a good way to help maximize the ROI of college.” Clark encourages her students to identify career goals and then reverse-engineer the path. “When you think about career first,” she says, “you then can find a faster path to cash.” This may seem like an impossible task. Isn’t college supposed to be the exercise that allows kids to discover their passions? But, Clark says, with the right approach it can work.
One of Clark’s clients, Kris Wise, a real estate professional in Texas, took this mindset to heart when she sat down to plan her two sons’ post-secondary education plans. Her elder son ultimately decided to skip college and dive headfirst into real estate. “He said, ‘Well, I can try real estate for a couple of years, and if it doesn’t work I can go to college.’ That was a huge cost benefit there,” Wise says. (He found success and stuck with it.) Her younger son was another matter. Good with numbers, he wasn’t excited about a potential career in accounting or engineering. What’s more, he was under the misapprehension that tuition was weighted depending on the average future earnings of each specific major. When Wise told him that wasn’t the case, he switched his approach from choosing a school to choosing a career. “The way he approached it really opened my eyes,” Wise says.
Wise’s son realized that, although he was good at math, he really enjoyed theatrical design. After trying his hand in his high school’s theater troupe, he began designing sets, which he loved. “Once that happened, a lightbulb just went on,” Wise says. “Now, when he talks about theater, he is on fire.” He decided to enroll at Oklahoma City University (OCU), majoring in theater and set design. He hopes to design sets for live theater, such as traveling Broadway shows, Las Vegas residencies, or even shows on cruise ships. According to Wise, because she and her son examined what he was most passionate about—rather than obsess over getting him into the best school on paper—he was better prepared for both a well-paying and personally rewarding career.
As for cost-benefit analysis, Wise is happy with her son’s decision to enroll at OCU. “The ROI is probably about right, based on what he could earn,” Wise says. With scholarships taken into account, his degree will run roughly $128,000, and an entry-level job pays about $60,000. “The ratio is similar to what I experienced when I graduated from college,” Wise says.
To teach him fiscal responsibility and further promote his career-first mindset, Wise is footing the bill for his first three years. “But the fourth year is on him,” she says. Above all, though, Wise is most content that her son carved out a path for himself. “It makes me feel great that it’s his path and not just what I told him he should do. I think about him being on a Broadway show tour, and it’s just wild to think what the future holds for him—something that we would never have thought of before.”
As for Adam Latif, who is about to finish his second year at Harvard, he initially chose to major in social studies but quickly realized that a STEM-related major would probably provide him with a more promising financial future. He switched to applied mathematics and economics. “I chose applied math not only because of its technical skill set but because it provides a greater range of career options, versus a humanities-oriented major,” he says. As for preprofessional programs, Latif got into only one—which, in hindsight, he is happy about. “It gave me time to think and not be influenced by other people,” he says. “But, honestly, the vast majority of kids don’t even know what they really want to do. We just hear people talking about getting an internship in consulting, so we say we want to do the same thing.”
Latif is still trying to chart a well-paying career path (his father wants him to pursue finance), but as his studies continue he sees his budding passions within economics and mathematics as a guiding light to him living his best life after he graduates—both personally and in terms of a profession. “At the end of the day,” he says, “it’s in my hands.”
Originally published on Town&Country on May 4, 2025
