College – How Do You Know if It’s a Good Investment?​

Investing in your child’s education? A tool from The Foundation for Research on Equal Opportunity helps estimate the ROI of over 50,000 programs. Some degrees offer substantial gains, while others may not pay off. Clark Wealth Partners can guide you in making informed financial decisions.

As you consider the significant investment in your child’s education, it’s natural to seek assurance that this investment will lead to a high-paying career. At Clark Wealth Partners, LLC, we empathize with your concerns and are committed to helping you make informed financial decisions, particularly in the realm of education expenses.

Understanding the ROI of Educational Choices

Many parents and college graduates share the expectation that higher education should ultimately lead to a well-paying job. This holds true for both undergraduate and advanced degrees. The steps taken before even attending the first class can significantly impact long-term financial outcomes. The right choices can lead to substantial financial gains, while poor decisions can result in significant losses.

Introducing the ROI Tool

To support you in this critical decision-making process, we recommend an invaluable tool developed by The Foundation for Research on Equal Opportunity. This nonpartisan think tank has created a resource that allows users to search over 40,000 undergraduate and 10,000 graduate programs to estimate their return on investment (ROI) over a career.

Key Findings from the ROI Tool

Here are some highlights to illustrate the financial importance of making informed academic decisions:

Bachelor’s Degree Programs:

  • Median ROI: $160,000
  • 23% of graduates experience a negative ROI
  • 6% of graduates enjoy an ROI above $1 million
  • Highest ROI: Computer Engineering at Princeton University ($7.1 million)
  • Starting salary significantly influences ROI: Degrees with starting salaries below $31,000 tend not to pay off, while those starting at $57,000 or more have the highest returns.

Associate Degrees and Certificate Programs:

  • ROIs vary widely: Technical trade certificates often offer higher ROIs than typical bachelor’s degrees, while two-year liberal arts degrees generally show no ROI.

Graduate Degree Programs:

  • Nearly half of master’s degree graduates experience a negative ROI, often due to high costs and modest salary increases.
  • Many MBA programs result in low or negative ROI.

Doctoral and Professional Degree Programs:

  • Professional degrees in law, medicine, and dentistry are highly lucrative.
  • PhD programs often show negative ROIs, particularly in fields like civil engineering.

Action Items:

  1. Explore the ROI Tool:
  2. Evaluate Potential Majors and Institutions:
    • Compare the financial outcomes of different majors and schools to ensure a positive ROI.

At Clark Wealth Partners, LLC, we are here to support you in making the best financial decisions for your family’s future. Please feel free to reach out with any questions or concerns.

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