A new database released by Georgetown University’s Center on Education and Workforce (CEW) ranks 4,500 colleges and universities based on their return on investment (ROI).

“At 1,233 post-secondary institutions (30% of all colleges), more than half of students 10 years after enrollment earn less than a high school graduate,” the Center writes in its accompanying report. “Previous CEW research suggests that these low incomes may be linked to low college graduation rates and income disparities by gender, race and ethnicity.”

The ranking rated schools on a variety of factors, including tuition and costs, average student debt, graduation rates, and net income after enrollment. Institutions were ranked according to return on investment for periods of 10 years, 15 years, 20 years, 30 years and 40 years.

Some surprises on the list included the prestigious Harvard University, which ranked 133rd in the nation for 10-year net present value and 45th for 40-year net present value.

“Twenty-five of the 30 institutions with the best short-term net economic gains primarily award certificates or associate degrees,” the Center noted. “Because these programs require fewer credits, they generally leave students with less debt and allow them to enter the workforce sooner. In the long run, however, the returns from these programs are lower than those from institutions granting bachelor’s degrees because the long-term incomes of students are lower.

Four-year institutions with low graduation rates have lost points in the rankings as students often leave with loans but no degree to boost their income.

“College is generally fee-based, but the return on investment varies by degree, program of study, and institution,” said CEW Director Dr. Anthony P. Carnevale. “It’s important to educate people about the risk of taking loans but not graduating, which could rob them of the increased income that would help them repay those loans.”

The top schools for long-term ROI were St. Louis University of Health Sciences and Pharmacy ($2.68 million), Albany College of Pharmacy and Health Sciences ($2.61 million), the Massachusetts College of Pharmacy and Health Sciences ($2.51). million), California Institute of Technology ($2.49 million) and Massachusetts Institute of Technology ($2.49 million).

Although private colleges dominated the top of the list, data actually showed that public schools on average have a better long-term return on investment.

“So the distinction is if you’ve gathered all the data from all the people who have gone public [institutions]they actually have a bit higher ROI, after 40 years and all the people combined who went to [private institutions],” CEW Director of Editorial and Educational Policy Martin Van Der Werf told Yahoo Finance in an interview. “But on an individual basis, you see soldiers at the top of the list.”

Public vs Private Schools

Part of the reason public schools generally perform better than private ones is because tuition is generally more affordable. Students at private colleges and universities are more likely to take out loans to cover tuition and other costs. According to data from the National Center for Education Statistics, about 65% of students at public universities have taken out some kind of loan, compared to about 74% of undergraduate students at private, nonprofit colleges.

“We know from the data that there are also a number of private institutions where graduates do not have good financial returns,” Van Der Werf added. “Most of the time it’s places like art institutes and music conservatories. They have students who have a real passion for these disciplines. But these are generally not disciplines that really pay off financially. They pay off, I think, in other ways, but they don’t pay off very much financially. And so these colleges and a few others tend to boil down to the aggregate numbers of private colleges.

Masked to protect against the coronavirus disease (COVID-19), graduate student Jakob Burnham studies on a blanket outside White-Gravenor Hall at Georgetown University on a hot sunny day in Washington, USA United, March 9, 2021. REUTERS / Kevin Lamarque

College tuition continues to rise

Nationally, college tuition has continued to rise for decades throughout the pandemic. The tuition hike also coincided with an overall decline in college enrollment rates since 2020.

The National Student Clearinghouse Research Center found that “total post-secondary enrollment fell 2.7% or 476,100 students in fall 2021, for a two-year total decline of 5.1% or 937. 500 students since the start of the COVID-19 pandemic”. Undergraduate enrollment alone fell by 3.1% (465,300 students) in 2021.

Major universities have already announced tuition hikes, starting next fall. The University of Virginia recently approved tuition increases of 4.7% for the 2022-23 academic year and 3.7% for the 2023-24 academic year. Penn State also announced last year that it would increase tuition and fees by 2.5% for incoming undergraduate students in the state. This represents the school’s first tuition increase since 2017.

It’s not really surprising that the cost of a college education is rising – the latest figures reflect broad price increases in nearly every sector of the economy. What might be more interesting is that due to extraordinarily high headline inflation rates in 2021, tuition fees have actually increased more slowly than headline inflation over the past year. In fact, last year was the first year in decades that average college tuition fell when adjusted for inflation.

The rate cut is hardly a victory for consumers struggling with widespread price increases that have wiped out wage gains. In recent months, consumers have been willing to pay higher prices, especially for food, but companies warn that this trend will not continue in the near future.

Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.

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