One recent morning, as they were bracing themselves to write the first check for the more than $50,000 tab for their son’s freshman year at the University of Chicago, Lisa Thorp, an attorney in St. Louis, and her husband, Andrew, who runs a nonprofit, happened to hear a radio story about recent college grads who couldn’t find jobs. Thorp remembers being appalled: “We looked at each other and said, ‘How do we make sure that is not our kid?’ ”
That’s the top-of-mind question for millions of parents of college-bound children these days. Even after a standard financial aid package is factored in, the cost of a degree from a public school for in-state students starting this year will run between $70,000 and $130,000, according to a MONEY analysis. (That estimate also takes into account the average time to graduation, since many students need longer than four years to complete their courses.) At private colleges the bills will typically run between $120,000 and $250,000. Meanwhile, the New York Federal Reserve recently estimated that about a third of college grads may be un- or under-employed.
Little wonder, then, that parents across the country are stressed about how to find affordable colleges that really help launch students into well-paid careers. In the past year surveys have found that more than 70% of parents report being worried about funding college. More than a quarter say college-financing worries keep them awake at night. And polls also show that the majority of families now believe that at today’s high prices, the most important reason for a college education isn’t to be able to think deep thoughts, but to land a good job that leads to financial security.
The concerns have even reached the White House. President Obama, whose older daughter is a rising high school junior, has ordered a new federal rating of colleges by 2015 to “create better incentives for colleges to do more with less, and deliver better value for students and their families.” Sounds great. The project, however, has been plagued by delays and faces stiff opposition from colleges over plans to cut funding for schools that get bad grades. How much insight the ratings will provide, and how soon, are open questions.
To offer families more immediate guidance and to help inform and advance the national conversation on this subject, we have developed a new and unique way of ranking colleges that identifies schools that deliver great value. Nine months in the making, MONEY’s Best Colleges whittled the country’s 1,500 four-year schools down to 665, after screening out those with below-average graduation rates and financial problems. Then we assessed the colleges on 18 measures in three areas: educational quality, affordability, and career earnings.
The factors are based on the most reliable and objective data available, using the most recent research about what really produces the best results in higher education. Among the indicators: a true cost-of-a-degree calculation that takes into account all school aid (including merit grants and athletic scholarships), as well as the time students at each college typically take to earn their diplomas, plus “value added” measures that assess how much better graduates of each institution perform in areas such as career earnings than would be expected given the economic and academic profile of the student body. (For a duper look at our methodology, see “How MONEY Ranked the Best Colleges.”)
For assistance in developing the rankings, MONEY partnered with Mark Schneider, former commissioner of the Department of Education’s National Center for Education Statistics, who was named one of the country’s 10 most important education influencers by the Chronicle of Higher Education last year. Schneider is now a vice president at the American Institutes for Research and president of College Measures which collects and analyzes data to drive improvements in higher ed. Schneider and the team at College Measures worked with MONEY to choose and develop the ranking factors. Major contributions also came from Payscale.com, which provided the earnings data and helped develop a measure to see if alumni of a particular college earn more or less than the average grad, no matter what type of majors (say, engineering vs. English) predominate at the school.
The result is a mix of well-known institutions (MIT, No. 3; University of Virginia, No. 16) and less familiar names (Bentley, No. 28; University of Washington at Bothell, No. 37) that share a common bond: They offer a top-notch education at an affordable price (or at least more affordable than their peers) that usually leads to a well-paid career.
Consider our overall winner, Babson College, in suburban Boston. Quality of education? Check. Babson specializes in business and entrepreneurship but also gives students a well-rounded education in liberal arts and sciences and lots of opportunity for hands-on project-based learning. Big financial payoff? Check again. Babson grads go on to earn hefty salaries, and the list of ventures they’ve started is impressive, including Home Depot and Zumba Fitness.
Reasonable people may disagree with the idea of ranking colleges or the specific methodology we’ve used. Certainly, it’s tough to boil down something as complicated as a college education into a series of data points, and the differences among schools ranked even within 20 places of one another can be slight, Schneider points out. Some of the data, while the best available, are imprecise. Our measure of the net price of a degree, for instance, is based on averages; your costs will be higher if your child gets little or no aid and could be substantially lower if your offspring graduates sooner than the school’s typical student or gets a more generous financial package, either from the school or from federal, state, or private scholarships. Meanwhile, the earnings data from Payscale are self-reported by alums who chose to fill out a survey, not the average salary of a school’s entire student body. And some people may object to placing so much emphasis on grads’ financial success.
Yet there’s growing agreement, even in the higher-education community, that “college is an investment, and you have to start treating it as one,” says Anthony Carnevale, director of the Georgetown Center on Education and the Workforce. “The purpose of higher education is to live more fully. But you can’t live fully under a bridge. You have to earn your keep.”
As you peruse our results, here are four important takeaways to aid you and your child in finding the right school at the right price—one that not only offers a great education but also helps ensure that your kid won’t be living under a bridge (or in your basement, for that matter) years after graduation.
Lesson 1: Sticker Price Is Not a Gauge of Quality or How Much a School Really Costs
“The published price of a college doesn’t tell you very much about what you’ll actually pay or of students’ later life success,” Schneider says. “There is zero correlation with most of our measures.”
In fact, more than half of students now get grants or scholarships that reduce their net costs, and some of the colleges with the highest sticker prices give out the most money. Meanwhile, at some colleges with very low tuition prices, students need an extra semester or more to get their degree, raising their total cost, often because of overcrowding or weak advisory services.
On the seemingly high side, for instance, is tiny Webb Institute (No. 2) in Glen Cove, N.Y., which has just 80 students and a sticker price of more than $60,000. But the school, which specializes in training marine engineers, awards every admitted U.S. student a full-tuition scholarship worth at least $44,000. (If your student has an early inclination toward a specialty—especially engineering or tech—you may want to consider small schools that focus on the field, given the strong showing by many on our list.)
Then there’s Princeton (No. 4), with a 2014–15 all-in price of $59,000, suggesting that a degree will run nearly $240,000. Yet Princeton gives out such large grants to the 60% of students who qualify (families earning less than about $250,000 generally get at least some aid) that it is often the lowest-cost Ivy League college. Our estimated net price of a degree: $146,200.
That Princeton price tag is only $2,400 more than our predicted net price for a BA from nearby Kean University, a public school that comes in at No. 458 partly because it takes the average student 4.8 years to earn a degree (vs. 4.1 at Princeton). It’s worth noting, though, that even 458th place in our rankings is a better showing than two-thirds of colleges.
Price is also not an indicator of the quality of education at a school or your child’s odds of success in life. Our data show that higher-cost colleges do not graduate a higher percentage of students than similar but lower-priced colleges, nor do their alumni earn more.
For instance, Bennington (No. 604) has an estimated net price of $157,000 for a degree but graduates just 64% of its freshmen in six years. At similar schools the rate is 75%. True, Bennington boasts many notable, high-earning creative types as alumni, such as Game of Thrones star Peter Dinklage and Pulitzer Prize–winning novelist Donna Tartt. The more typical recent Bennington grad, though, earns about $34,000 a year, 14% less than the average newly minted BA, after adjusting for majors.
Meanwhile, at UC–Irvine (No. 32), a degree costs Californians about $123,000, and 86% of students graduate in six years—15 percentage points better than the typical school with a similar student profile.
Your best move: Use our net price estimate as an initial screen. But don’t eliminate a college as unaffordable until you calculate your family’s true net price. To get personalized cost estimates, use free web tools such as the net price calculators on each college’s website, CollegeAbacus.com, or CostOfLearning.com.
Lesson 2: A High-Quality Education Pays Off in More Ways Than You Might Expect
The most important payoff that a college is supposed to deliver is a great education. But as yet there aren’t any reliable measures of what students learn. So to judge the quality of a school’s education, MONEY relied on indicators that higher-ed experts say are the most reliable and highly correlated with later life success. They include the number and quality of professors, the academic preparation of the student body, and the college’s graduation rate.
Many studies show, for example, that a student’s peers affect everything from time wasted on videogames to post-graduation jobs. Great professors also make a great difference. A major study called “Academically Adrift,” which followed 2,000 freshmen starting at 24 colleges from 2005 until 2011, found that students whose classes were not demanding—think multiple-choice tests vs. essays and papers—learned less. And graduation rates are the best indicator of quality, says Schneider, “because a low rate indicates the college does not help its students succeed.”
Research also suggests that schools with high educational standards produce happier, healthier, and more financially secure adults. The “Academically Adrift” study, for example, found that two years after graduation, the 25% of students who learned the least in college were three times as likely to be unemployed and twice as likely to have moved back in with their parents as those in the top 25%. And they were half as likely to have a romantic partner.
MONEY’s analysis confirms the connection between educational quality and later life success. Within a few years of graduation, alumni of the 100 schools with our top scores for quality were, on average, a fifth as likely to have defaulted on their student loans as alums of the bottom 100. By the time they hit their prime working years, those grads were also earning 17% more than peers from lower-ranked schools.
Your best move: Focus on colleges that score well on MONEY’s quality indicators. Then dig deeper and zero in on schools that are adapting to new research showing what really boosts student learning: demanding classes (for example, those that require at least 40 pages of reading a week) and project-based learning. Nobel Prize–winning physicist Carl Wieman says that “active” instruction techniques, such as those requiring undergrads to work in groups to tackle real-world problems, result in far greater learning. He suggests prospective students visit colleges and “sit in on a class and don’t let the college tell you which ones” to see whether the professor is just droning on or students are working on challenging tasks in and out of class.
Lesson 3: It's Not What or Where You Study – It's Both
As many other surveys have found, our results confirm that graduates of elite tech schools typically make the biggest bucks. Our analysis also confirms that no matter which college your child attends, majoring in science, technology, engineering, or math (STEM) is likely to result in a bigger salary down the road. But our ranking also identifies scores of schools that excel at helping those who choose less economically promising majors (say, English or philosophy) to earn far more than the norm. The top “value added” schools help launch students who didn’t earn top grades in high school or who come from lower-income households into financially successful careers as well.
To reach those conclusions, MONEY analyzed the Payscale earnings data to determine the impact of students’ test scores, financial background, and choice of major on salary outcomes. We found that within five years of graduation, alums from the 665 schools on our list with a STEM degree typically earned more than $50,000, vs. an average of less than $40,000 for arts and humanities majors. But we also found dozens of schools that shine at helping students who don’t have a technological bent land good jobs. Among the top 100 schools that produce high earners after the effects of major are subtracted are dozens of liberal arts colleges, including elite Williams College (No. 14, profiled at right) and Manhattan College (No. 40) in Riverdale, N.Y., where SAT scores for admitted students tend to be in the low- to mid- 500s, but whose grads report earning about $110,000 a year about 15 years into their careers.
Your best move: Use MONEY’s rankings as an initial screening tool, then seek colleges whose “practices will help you graduate and succeed,” advises Schneider. Those best practices, according to recent research by Gallup, include lots of student participation in clubs and personal attention from great professors.
That’s what worked for Winta Habteslassie. After Habteslassie had trouble getting into classes related to her marketing major at California State University at Northridge (No. 189), she transferred in 2011 to Mount St. Mary’s, a private women’s college in Los Angeles. Her accounting professors were so encouraging that she switched to that more lucrative major and joined the school’s accounting association. That helped her win a job at Deloitte & Touche, where she’ll be starting this fall. Mount St. Mary’s is No. 122 on our overall list but No. 1 on our Value All-Stars list because of its outstanding record help- ing attendees succeed beyond what would be expected given their economic and academic backgrounds.
Lesson 4: Career Services Are the New Climbing Wall
Across the country, colleges are making their career services offices a stop on campus tours and part of their marketing pitches. “Kids look at the climbing walls,” says Jerry Houser, director of the career services office at Willamette University in Salem, Ore. “But parents are stressed about debt loads and jobs.” That concern has prompted schools like Willamette (No. 407) to substantially beef up career offerings, Houser says.
Good career services, especially programs that place students in paying internships, can help dramatically. That’s why the number of such staffers per student is a factor in our rankings. Nearly two-thirds of graduating seniors who had internships report getting job offers—almost twice the level of seniors who didn’t do internships, the National Association of Colleges and Employers reports.
Your best move Robin Schlager, 55, a town councilor in Montclair, N.J., shudders when she remembers a relative who, after four years at a pricey private college, visited the career services office to find out about jobs and got nothing more than a pamphlet. A college internship at a radio station launched Schlager in a career in the music industry, so she was determined her two children would go to schools that gave them such assistance. On campus tours she grilled guides and admissions officers about internships and job-placement rates. It paid off. Her son just graduated from the University of Delaware (No. 66) and parlayed an internship at J.P. Morgan into a full-time job. Schlager says many friends’ kids are still unemployed, “but my son got a job! With a signing bonus! What a gift!”
Experts say everyone looking at colleges ought to do that kind of digging. Ask about the school’s record at getting graduates into med school or Wall Street jobs, if your child is so inclined. For undecided students, ask about programs to get them thinking about careers as freshmen, says Marilyn Emerson, an independent educational consultant in New York City and past president of the Independent Educational Consultants Association. She says the top colleges help students get internships, connect them with working alums, conduct mock interviews, and offer lessons in salary negotiations.
In the end, of course, all the data in the world won’t matter if the student doesn’t fit into campus life and feel motivated to take advantage of a college’s resources. While the University of Chicago (No. 101) racks up good numbers for quality of education and graduates’ earnings, “it is a leap of faith,” says Lisa Thorp. “It is not all about the money. But we have our fingers crossed that he will come out on the other end gainfully employed.” Just in case, they’re hedging their bets a little. “We don’t plan to change the locks.”