College still pays off financially for the lowest-income students but some institutions pay off more than others, a new analysis finds.
Students whose families earn $30,000 or less per year—who account for more than one-third of U.S. college students—tend to earn less than their classmates whether they attended a public or private institution, according to “The Colleges Where Low-Income Students Get the Highest ROI,” by the Georgetown University Center on Education and the Workforce. The gap persists equally among students who earn a certificate, associate’s degree or bachelor’s degree.
But when it comes to four-year diplomas, public institutions lead the way, helping low-income students reach an average of $951,000 in earnings over the next 40 years. Private institutions ($863,000) and for-profit colleges ($763,000) provide a lower ROI, the report finds.
And while this order holds true for associate’s degrees and certificates, lifelong earnings from those diplomas can exceed $1 million for low-income students who attend certain colleges. The analysis of US Department of Education College Scorecard data from 2020 ranked several factors including net price, percent of students on Pell Grants and those students’ graduation rates. It also considered net present value, which measures “how much a sum of money in the future is valued today.”
Despite the overall finding that public institutions generally provide a higher ROI, the report’s top 10 list reads almost like a typical “best colleges” ranking of private nonprofits, including Georgetown, Stanford, Hartford, Tufts, MIT, Princeton, Duke and Yale. These institutions boast Pell graduation rates of over 90% and lead to substantial 40-year earnings, the study found.
The top public institutions on the list include Colorado School of Mines (30), Georgia Institute of Technology (47), University of Virginia (48), William & Mary (60) and University of California, Berkeley (63).
You can search the report by institution by clicking here and scrolling down to the database.
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