Paying for college may be one of the biggest investments of your life. Undergraduate tuition, possible graduate degrees and room and board all add up â€” especially for students taking out loans. So, is the big expense of a college degree worth it?

The answer depends on the type of degree you get, where you got to college, how long it takes you to finish school and how you use your degree when you graduate. However, a college degree will likely give you a financial return over time.

While the average return for a Bachelorâ€™s degree in 10 years is negative, after 20 years, the ROI goes up to 38.1%.

## Estimating how much a college degree costs vs. earning potential

Return on investment (ROI) is a common term used for investing. It tells you the average earnings you can expect when you compare the return to how much you invested. You calculate ROI as follows:

• ROI = Net income / cost of investment x 100

Any return higher than 100 percent means you are earning money. A return lower than 100 percent means you are losing money.

To consider ROI for a college degree, consider how much earnings you can expect versus how much the degree costs. You likely wonâ€™t earn enough to offset the degree within one year, so letâ€™s consider the potential return over 10 years. The equation looks like this:

• ROI on college degree = (Average yearly income for degree x 10) / Total cost of degree and education expenses x 100.

Let’s say you go to college to become a circus performer. The total cost of the degree and all education costs is \$50,000, and you earn \$60,000 per year after you graduate. The ROI for your degree is 120 percent. That means you have earned 20 percent more over 10 years than you would have without the degree.

In your calculations, consider the cost of interest you will pay over time if you take out student loans. This can minimize the amount of return you get on your degree. Use a student loan calculator to understand how much your loans can cost you over time.

## Estimated loan payments based on degree and occupation*

So, is your degree worth it? Weâ€™ve gathered data on estimated annual salary, degree cost, and loan payment amounts for several degree types. See how your degree measures up.

Occupation Minimum required years in college, graduate school and professional programs Estimated annual salary Estimated education costs Monthly loan payments under 10-year repayment plan Percentage of monthly income put toward loans
Sources: Occupational employment statistics from the Bureau of Labor Statistics; average undergraduate tuition costs from College Board; average graduate school tuition costs from the National Center for Education Statistics; average medical school costs from Shemmassian Academic Consulting; average pharmacy school costs from College Tuition Compare; average dentistry school costs and average law school costs from College Ave Student Loans; average veterinary school costs from the American Association of Veterinary Medical Colleges.
*Education costs are based on the tuition and fees for in-state public schools with no scholarships. The chart above assumes 5 percent student loan interest on a standard 10-year repayment plan, with loan amounts for the full cost of education. These numbers will vary based on the individual and are to be used solely as an informational tool. To see how much you could pay per month based on your loan amount, interest rate and repayment terms, check out Bankrateâ€™s student loan calculator.
Accountant 4 \$81,660 \$43,760 \$464 6.82%
Advertising, marketing, promotions, public relations specialist 4 \$148,740 \$43,760 \$464 3.74%
Civil engineer 4 \$95,440 \$43,760 \$464 5.83%
Dentist 8 \$186,300 \$211,468 \$2,243 14.45%
Economist 4 \$120,880 \$43,760 \$464 4.61%
English language/literature teacher, postsecondary 6 \$81,340 \$68,548 \$727 10.73%
Lawyer 7 \$148,910 \$132,590 \$1,406 11.33%
Librarian 6 \$54,400 \$68,548 \$727 16.04%
Market research analyst 4 \$73,970 \$43,760 \$464 7.53%
Marriage and family therapist 6 \$56,890 \$68,548 \$727 15.33%
Microbiologist 4 \$91,840 \$43,760 \$464 6.06%
News analyst, reporter, correspondent 4 \$66,000 \$43,760 \$464 8.44%
Pharmacist 6 \$125,460 \$70,034 \$743 7.11%
Physician: family/general practitioner 8 \$214,310 \$208,140 \$2,208 12.36%
Political science teacher, postsecondary 6 \$100,970 \$68,548 \$727 8.64%
Political scientist 6 \$124,100 \$68,548 \$727 7.03%
Public relations specialist 4 \$71,940 \$43,760 \$464 7.74%
Teacher (elementary and middle school) 4 \$65,300 \$43,760 \$464 8.53%
Veterinarian 8 \$108,350 \$198,255 \$2,103 23.29%
Zoologist, wildlife biologist 6 \$70,510 \$68,548 \$727 12.37%

## Estimating costs based on in-state vs. out-of-state schools

The main consideration when deciding between an in-state and an out-of-state school is the cost. In-state schools tend to be much less expensive than out-of-state and private institutions.

Type of college Average published yearly tuition and fees
Source: College Board
Public two-year (in-district) \$3,860
Public four-year (in-state) \$10,940
Public four-year (out-of-state) \$28,240
Private four-year \$39,400

If you have difficulty deciding between an in-state and an out-of-state institution, remember that more expensive does not necessarily mean better. Attending an in-state institution is the best financial decision for many students, and earning a degree benefits your future career regardless of the university you attend.

If thereâ€™s a specific program you want to attend, or if youâ€™d prefer to live away from home, an out-of-state college could be a good choice. Otherwise, investigate the colleges near you to see if theyâ€™d be a good fit.

## Estimating ROI if you attend a top college

When it comes to future employment opportunities, there are certainly benefits to attending a top school. While attending any college or university can help you establish valuable skills, top schools can provide benefits like increased networking opportunities and overall higher graduation rates.

Attending a top school may also lead to a higher salary. According to PayScaleâ€™s 2021-22 College Salary Report, students who graduated with a bachelorâ€™s degree from top private schools or Ivy League schools earned higher salaries on average than those who attended state schools.

However, the investment that you get out of your collegiate experience doesnâ€™t depend only on the college you attend, and having a degree from any school is better for your salary potential than having no degree. The major that you pursue and your general academic success while in college, whether at a top school or not, can have a major impact on the ROI of your college degree.

## Other factors of ROI besides finances

The cost of your degree is an important factor in determining your ROI, but other factors can also impact your return:

• The current economy: If you graduate in an economic crisis, you may have more trouble finding a job and reaching your earning potential initially. This can lessen the return of your degree. Conversely, a healthy economy can help you get a higher return by offering more job opportunities.
• Length of time in school: Sometimes it takes longer to finish a degree than initially planned. Other times, you can graduate early. Obviously, taking longer means a higher cost for your education, while graduating early means the cost is lowered. These factors can impact the length of time it takes for you to start seeing a positive return on your degree.
• Life decisions: Life is unpredictable and your plans can change. You may need to unexpectedly take time off from work or school. Or, you may decide you want to change careers. Life decisions like these can change the ROI for your degree, both negatively and positively.

There are certain factors out of your control when it comes to how much of a return you can get on your degree. However, staying aware of how different environment and life changes can impact both the cost of your education and your earning potential. Use this information to remain flexible with your plans and adjust when needed.

## Bottom line

Attending college, no matter the school, can be a great investment in your future. On top of helping you learn valuable skills, your degree can open doors to future career opportunities.

When considering which college to attend and what to major in, calculate your return on investment to determine if itâ€™s a good financial fit for you. You can do this by searching the average salary of the career youâ€™re going to school for and comparing that to the potential cost of your student loans.