New Metric Reveals the Risk-Reward of Attending Specific Colleges

Everyone knows that college costs a pretty penny. Tuition costs are constantly on the rise and more and more students find themselves taking out student loans in order to fund their higher educations. While college is definitely a smart investment to make for your future, it is crucial to choose one that will give you the best chance of financial success in the future. What does this mean? Well, first off, you should consider how much the college costs in relation to schools of similar prestige. This is important because the more the expensive it is, the more debt you will potentially have to take on. After looking at the costs of colleges, you should look at how much the average graduate makes. This will give you an idea of how much debt you might be in and how long it will potentially take you to pay it off.


A recent study by LendEDU, considered both of the above statistics for over 1,000 schools and created what we call the College Risk-Reward Indicator, or CRRI. The CRRI is simply defined as the average early career pay divided by the average student debt at graduation. Average early career pay was defined as the median salary for alumni with 0-5 years of experience.

For schools with CRRI values over 1, students can expect to make more money after graduation than the amount of student loan debt they will hold, and vice-versa for CRRI values less than 1. Schools with high CRRI ratings should be considered the least financially risky schools to attend and schools with low ratings should be considered the most risky.

We found the average CRRI to be 1.68—meaning that the average early career salary will be around 68% greater than the average debt at graduation. Princeton University had the highest CRRI value at 9.29, while the lowest was 0.77 by Springfield College.

The reason we looked at early career pay was because the first few years after graduation are the most critical for student loan repayment. Right after graduation, the principal balance on loans is the highest, which means more interest accrues each month. Falling behind on payments has a much greater affect early on in the repayment phase as compared to years later when the principal balance is much lower.

A report from the Federal Reserve revealed that 10.3% of graduates from public 4-year universities, and 11.6% of graduates from 4-year non-profit private universities, are delinquent on their student loan payments. Many of these people most likely had significant student loan debt and low-paying jobs or were unemployed.

If you are applying for colleges, make sure you consider both the average debt at graduation and the average early career pay—two metrics that are often overlooked. You can check out the full list of schools that we analyzed and their corresponding CRRI values here. In addition, the following infographic shows the top 25 and bottom 25 schools in the nation in terms of CRRI.

Dave Rathmanner is the Director of Content Management for LendEDU, a marketplace for student loan refinancing. LendEDU helps student loan borrowers compare prequalified quotes from the leading refinancing lenders in the industry with one free application—saving the average user over $14,000.

18 thoughts on “New Metric Reveals the Risk-Reward of Attending Specific Colleges”

  1. With the possibility to have our three children all in college over the next five years and two next year. This type of information is great to have and often being discussed in our house. It important for any college bound person to my a wise choice and be think cost and return on investment when heading off to get a degree.

    1. I definitely agree Brian! Too often people only consider the cost of college and don’t think about the return on investment. In my own college search I narrowed my choices down to 2 – an in-state school and a much more expensive out-of-state school. Both were very similar in prestige and graduates from both schools often went on to obtain solid careers. I ultimately decided to attend the in-state school because I liked it just as much as the other and it would save me (and my parents) tens of thousands of dollars.

  2. Great information. While many have taken to suggesting college is not worth it, I remain a firm believer that attendance is an absolute necessity for most if they plan to be/remain relevant in an ever changing, competitive environment.

    It isn’t a question of if an individual should seek out post-secondary education and training, it is really a question of how it can be done most efficiently, with particular attention paid to the discipline(s) and cost.

    1. Hey James,

      You said it perfectly “It isn’t a question of if an individual should seek out post-secondary education and training, it is really a question of how it can be done most efficiently, with particular attention paid to the discipline(s) and cost.”

      Inefficiencies in the higher education system could be blamed for rising costs, and rising student loan debt delinquencies.

    2. Exactly! I think while some people may find better value in attending a trade school or some of these new tech bootcamps that are sprouting up, the majority of people will benefit the most by attending a typical 4-year college.

      Like you said, besides choosing a college that provides great value, choosing a major is also very important. There is more data coming out every year about which majors lead to the best opportunities for a career and this should be strongly considered as well!

  3. This is really important info for anyone looking at a college education. I’d love to see similar data for the risk-reward by major. Having the information to select the most financially solid career path from the least risky college would be an incredible resource and might get our young people really thinking ahead to their financial future.

    1. That would be a great data point Gary. Important for college bound students to be thinking of the major to job connection.

  4. I didn’t know you worked at LendEDU! This is a very interesting study for sure! Most kids will never go to one of these top tier schools, but it’s crazy to see how much higher their income potential is in real numbers.

  5. That’s a good guide to have and I’m happy to see a couple of CUNY schools there since we live in the NYC area. Both my wife and I went to SUNY schools and enjoyed our experiences…it was also a lot more affordable. However, it also depends on the students situation and major. If the child was an excellent student wanting to major in Finance at NYU’s prestigious Stern Business School or Engineering at Carnegie Mellon, I would consider it. If they were just a general studies major wanting to go to some unknown expensive private school…then I might not be down with that.

  6. It might be worthwhile for someone to run numbers for 2 year schools, although I guess there’s a lot more of those and the figures may be harder to come by. But I think the vo-tech and juco sector has been where a lot of the growth in for-profit schools have been, and there are a lot of people who get loans to pursue associate’s degrees and certificates but haven’t been able to make their education pay off.

    1. Agreed Emily. All types of education/training should be evaluated. Not everyone will go on to complete a four year degree.

  7. I know when i looked into grad schools, I chose the one I did (CO School of Mines) because of its’ reputation in the petroleum industry, and strong recruiting by majors and minors from there. It also is instantly recognized and known by anyone in the industry, so i don’t ahve to explain where in the world my school actually is. 🙂
    Before applying I asked the geology dept head the differences in average starting salaries for environmental geo’s, geotechnical engineers, and geologists going into petroleum, and it ranged from $60-$80k/yr, ~80k/yr, and $90k/yr and up respectively. I ahve to say, that proved true as myself and all of my graduating class got jobs starting at the $90k/yr and up range. I also asked about hiring rates and found out that over 80% of the petroleum geologists got offers straight out of grad school, which helped solidify that decision.
    That is something to definitely check out before attending any school though. That’s some nice research by your company!

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