The Best Colleges for Making Money

Is an Ivy League education worth the money?

The debate over the long-term value of a pricey private-school education is heating up, especially in this tough economy. Sure, everyone knows that by sticker price alone, public schools are a sweet deal, with out-of-state tuition and fees that run about 30 percent less than most of their private rivals—and in-state fees running up to three-quarters less.

Indeed, the math is pretty jarring; the difference, on average, ranges between $7,700 and $18,600 a year, obviously no small matter with stock market woes depleting so many people's savings. But in the back of everybody's mind, there's that nagging question: Is the extra money worth it?

To their credit, elite private schools do boast lower student-to-faculty ratios, fat endowments and name-brand cachet that, along with their active alumni networks, have long provided entrée into the upper echelons of the working world.

But if long-term career and salary are what matters—and what else should, especially in today's economy?—then a growing chorus of private-school critics point out that the public-school scenario may actually deliver a far better bang for your buck.

The SmartMoney Rankings

In a new twist on traditional college rankings, SmartMoney took a crack at quantifying the long-term value of a college education. Our goal was to spotlight the relationship between tuition costs and graduates' earning power. Working with consultant PayScale.com, which recently published a groundbreaking survey on alumni salaries, we first looked at what graduates from 50 of the most expensive four-year colleges earn in their early and midcareers. Then we factored in their up-front tuition and fees. The result? A unique "payback" ratio for each school.

In the end, our scorecard may be music to the ears of many state-school admissions deans—not to mention a lot of struggling parents. After all, who would've guessed that University of Georgia (the oldest state-chartered college in the nation—and No. 1 in our survey) would deliver a payback nearly three times that of Harvard? Or that the state universities of Delaware and Rhode Island would beat out every Ivy in the ranking?

Indeed, those unheralded public universities turn out to be a far better deal than virtually all the privates we surveyed. The Ivies in general? They deliver nowhere near the payback on tuition that most parents staring at a six-figure bill over four years might expect.

Return on Tuition Investment

Ultimately, we weren't trying to measure the quality of education or colleges' selectivity. Other rankings take ample care of that, and dedicated students will thrive at any of these fine schools. But with boutique private colleges coming under heavy criticism for spiraling costs, our payback numbers certainly raise questions about the actual "return" on an educational investment. For parents fretting about sending their kid to the University of Washington versus, say, Columbia or Brown, they can rest easier knowing that Husky alums recoup their tuition costs, on average, twice as fast as grads from those two Ivies.

Of course, rating colleges is not an exact science, and our methods did get their share of criticism from the private-school sector. At Carleton College, a small liberal arts school in Minnesota that normally ranks very high in college surveys—but only 39th in ours—Dean of Admissions Paul Thiboutot says we underestimated their alums' average salaries by including only those who stopped at a bachelor's degree. "The real earning power is what they end up doing in professional and graduate school," he says.

Other private schools, including the Ivies, say that many of their students pay less than the full sticker price we used for tuition, because of grants and scholarships. (True, but public schools also discount their tuition, especially for in-state students.)

Then there are the schools that argue that payback surveys miss the whole point, since you should enter their hallowed halls to enrich your mind, expand your cultural IQ and improve your critical thinking. (Why else would anyone suffer through Descartes, Dostoyevsky and differential equations?) Caesar Storlazzi, Yale's director of student financial services, for one, points to his school's world-class faculty, libraries and art collections. "Put this all together and the experience is without compare," he says.

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