Our Method for Assessing Affordability and Return

In our article “The 50 Most Affordable Colleges with the Best Return,” we sketched a method for determining whether a college is at once affordable and also provides a good return. Here we lay out that method in detail. It involves two criteria, one for affordability, the other for high return.

Our criterion for affordability is simple: an affordable college is one that charges no more than the average in-state tuition for a public college or university. As of 2014, that average is under $15,000. This is our cutoff. Note that tuitions of private colleges and universities readily exceed $30,000 a year, with some even approaching $50,000. Note also that where in-state and out-of-state tuitions differ, we always list in-state tuition costs (we assume that if you attend a school in a given state, you will be a resident of that state).

Our criterion for return on investment looks at starting and mid-career salary, and then estimates total income over 15 years from the time of graduation. Specifically, we look at PayScale.com’s starting salary and 15-year salary after graduation, average the two, and multiply by 15, to estimate total income over 15 years from graduation.

For instance, our top ranked college is the U.S. Naval Academy. It charges no tuition. Upon graduation, students typically earn $77,100. Fifteen years into their careers, graduates typically earn $131,000. Adding these amounts, dividing by 2, and then multiplying by 15, yields a return of $1,560,750. This return is the highest of all affordable colleges.

Why did we choose our return measure to estimate total income in the first 15 years following graduation? Because 15 years provides a reasonable time in which to assess whether your education has paid off.