Americans have always loved rankings, especially university rankings. Having become accustomed to overall university rankings and program rankings, international students now have a new reference point when choosing a school—the university's return on investment.
Recently, the online salary data organization PayScale published a report titled "2010 U.S. University Return on Investment Report" based on its 2009 survey of starting salaries for U.S. college graduates. The report begins by stating: "Do not compare university tuition; compare the return on investment after attending university."
[Report Explanation] "Return on Investment"—An Economic Question About Universities
The subjects of the report are full-time employees who graduated from undergraduate programs in the United States and are working in the U.S. Any respondents with higher degrees are excluded, as are those in fields such as law and medicine; freelance professionals such as architects or writers who are compensated by project count are also excluded. The subjects are registrants who completed the PayScale employee salary questionnaire.
According to this report, calculating the university return on investment mainly revolves around two concepts: the investment cost of attending university and the returns after graduation.
The investment cost refers to the expenses of attending university. In this survey, these expenses include tuition, accommodation, book fees, and miscellaneous fees. The annual costs multiplied by the duration of attendance equal the total cost of enrollment. Unlike Chinese universities, where the undergraduate program typically lasts four years, students in the U.S. can change majors or take leaves of absence, so the duration of study is not uniformly four years. In calculating the average costs of universities, the report conducted a statistical analysis of the enrollment years of undergraduate graduates over the past 30 years and concluded that 4-6 years is the "typical time" for undergraduate graduates to complete their studies.
Next, let’s discuss the returns of attending university. Returns are not only the income after graduation; the report compares the additional earnings of undergraduate graduates over high school graduates. Once students choose to attend university, they forfeit the 4-6 years of "work income" they could have earned immediately after high school, which is referred to as "opportunity cost" in economics. The report took the median annual salary of undergraduate graduates from 1980 to 2009 and compared it with the median annual salary of high school graduates over the past 34-36 years. This comparison serves as a reference factor for the university return on investment.
Private Universities Dominate the Top 10, with the Massachusetts Institute of Technology Having the Highest Return on Investment
Among the top 10 universities for return on investment, the Massachusetts Institute of Technology (MIT) leads the pack, with an average enrollment cost of $189,300 in 2009 and a 30-year return on investment of $1,688,000, achieving an annual return on investment rate of 12.6%. Under MIT's leadership, private universities in the U.S. perform exceptionally well. The top 10 return on investment rankings are entirely occupied by private universities, confirming their strong position in the U.S. higher education system (see table: Top 10 U.S. Universities by Return on Investment).
For domestic audiences, Harvey Mudd College and the University of Notre Dame may be considered "new faces" on the list. Harvey Mudd College is a prestigious liberal arts college in the U.S. and is one of the few liberal arts colleges that focus on mathematics, natural sciences, and engineering.
In the U.S., liberal arts colleges represent small, elite-style education. These schools generally do not offer vocational majors but provide courses under three broad categories: natural sciences, social sciences, and humanities. This "discriminatory" approach towards vocational training reflects the educational principle of liberal arts colleges: not to cultivate specific talents but to provide a liberal education. Harvey Mudd College's inclusion in the top 10 is not coincidental; it ranked among the top 10 in PayScale's 2009 starting salary rankings for undergraduate graduates, demonstrating the strength of liberal arts colleges.
The University of Notre Dame is a rising star in the Ivy League. Like many ancient Western universities, the University of Notre Dame has a strong religious and upper-class background. Relying on a powerful alumni network, the university maintains close relationships with government and business conglomerates. The alumni donation rate of the University of Notre Dame is second only to Princeton and tied for second in the world with Harvard University. Academically, the university ranks alongside the Massachusetts Institute of Technology, Stanford University, and the University of California, Berkeley, as a new member of the Ivy League, challenging the old Ivy League led by Harvard University.
The University of California, Berkeley Leads Public Universities
If public universities were to be ranked separately, the University of California, Berkeley would take the top spot for return on investment. The average enrollment cost for the university in 2009 was $118,900, with a 30-year return on investment reaching $1,223,000. However, this data pertains to in-state students. Due to the different tuition rates for in-state and out-of-state students at U.S. public schools, the report calculates these separately. Of course, out-of-state students attending the University of California, Berkeley also benefit, as it ranks second in the public university return on investment rankings (see table: Top 10 U.S. Public Universities by Return on Investment).
For domestic families considering studying abroad, the Colorado School of Mines may be a new name. It is a public research university primarily focused on engineering and applied sciences and is one of the world's leading institutions in resource development, mining, and utilization research.
"STEM" Imprint Reflects Social Trends
Whether public or private, the entire ranking is heavily marked by a "STEM" imprint. Industry insiders analyze that this list, which reviews salary trends from 1980 to 2009, corresponds to the booming trends in electronics and engineering over the past 30 years. For example, the Massachusetts Institute of Technology ranks first, and the report mentions several major career paths for its graduates: mechanical engineers, senior software engineers/developers/programmers, and aerospace engineers—all of which have strong STEM backgrounds that are in high demand in the job market, closely linked to the continuous updates in electronic engineering technology.
Professionals analyze that for students intending to study in the U.S., this ranking can serve as a reference when choosing schools and majors, helping them understand industry trends and prepare for employment.
