Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.
Updated on Monday, September 14, 2015
Given the increasing cost of a college education, and the record level of student loan debt used to fund that education, American families are increasingly focused on the value of their investment. In very simple terms, people want to know how much money they will they make after graduation, and will they be able to afford their student loan debt burden. Increasingly savvy parents and potential students will question the value of an education provided by institutions that consistently graduate students unable to earn good salaries.
Over the weekend, the White House released College Scorecard data which can help parents understand the value of an education. MagnifyMoney has analyzed the underlying dataset and is pleased to report a ranking of the 20 Best and 20 Worst Universities. The method for ranking the schools is simple: the best schools help students generate the highest incomeafter student loan expenses, and the worst schools have students with the lowest incomeafter student loan expenses.
Although many traditionally elite schools top the list (like MIT, Harvard and Stanford), the #1 school in the country is MCPHS University (Massachusetts College of Pharmacy and Health Sciences), where students earn $113k after student loan payments, and a large public university, the University of Colorado – Denver, also makes the list, with students earning over $70k a year after student loan payments . The worst school in the country is Benedict College, where students earn only $16k after student loan payments.
- MCPHS University, MIT, Harvard, Babson, and Georgetown are the top 5 schools for graduate income after student loan payments are factored.
- MCPHS graduates taking financial aid earn a median $113,069 after median loan payments of $278 among borrowers, compared to the average of all 884 schools analyzed at $41,712 in income and $261 in loan payments.
- Across all 884 schools, median debt to income burdens averaged 7%, ranging from a high of 27% to a low of less than 1%, with an average 56% of graduates taking Federal loans
- The average cost to attend net of scholarships and grants across the 884 schools analyzed was $18,783 with median debt for graduates of each school averaging $23,541.
(Click on the graphic below to enlarge)
MagnifyMoney analyzed the College Scorecard database to derive the top schools for take home pay for student loan borrowers.
The College Scorecard database includes median income for graduates of schools who received financial aid as reported by the IRS, along with student loan balances from the Department of Education. MagnifyMoney’s analysis covers 884 U.S. schools in the 2015 College Scorecard database with 2,000 or more students granting Bachelors degrees.
Combining reported income with payments on student loans factors in post graduation earning power, the cost of education, scholarships, grants, and student loans used to finance the degree. The income reported by the College Scorecard database is for the 5th – 10th years after enrolling in a school, which for a typical 4 year school student represents the years immediately following graduation.
- Income after loan payments: Median annual income of graduates receiving Title IV aid less median student loan payments. Income is the average of the 6th to 10th year after enrollment in a school as reported by the College Scorecard database. So for a student who graduates in 5 years, it represents earnings 1 to 5 years after graduation. Students enrolled in graduate school during this period are excluded from the data.
- Monthly loan payment: Median monthly federal student loan payment
- Loan balance: Median loan balance of borrowers upon leaving the school
- Debt to income: Median loan payment divided by median graduate income
- Average Cost: Cost to attend, less stipends and scholarships
- Graduate who borrow: Graduates with outstanding federal loans
- At 7 of the top 20 schools 50% or more of graduates borrowed to finance their education.
- At 15 of the top 20 schools the average cost of attendance after scholarships and aid is over $20,000 a year.
- 13 of the top 20 schools have median graduate debt of $20,000 or more – illustrating how high debt in itself is not a barrier to high take home pay.
- MCPHS University, the top school, has an average loan balance of $25,000, well supported by median income after loan payments of $113,069.
- 17 of the top 20 are private universities.
- 10 of the top 20 offer both liberal arts and scientific degrees.
- 8 of the top 20 are institutes of technology, while #4 Babson offers all students Bachelors of Science in Business degrees, and #1 MCPHS only offers health science degrees