High-value colleges give generous aid packages and graduate students into well-paying jobs.
December 04, 2017
Three-in-four college students use student loans to help pay for higher education. But, how do those loans affect life for college graduates through their 20s, 30s, and 40s?
Growella, a leader in personal finance education, researched to found out.
Using an algorithm based on tuition rates for a university’s in- and out-of-state students; the school’s propensity for giving scholarships and grant money to its students; and, the typical salaries available to that school’s graduates, Growella uncovered each school’s student loan ratio of Payment-to-Paycheck.
Schools where students retain more of their paychecks are “a better value.”
“The cost of a college should not be measured by its sticker price alone,” said Growella Founder Dan Green. “Students must also consider the amount of money a college makes available through scholarships and grants, and the salaries that a typical graduate of that school can expect.”
Growella’s study, which focused on schools in the Big Ten conference, found that measuring the value of a school based solely on its tuition rate is misleading. The University of Michigan serves as an excellent example.
Tuition rates at the Ann Arbor, Michigan-based extend past $200,000 for out-of-state students, which is the highest in the Big Ten. However, the University of Michigan is also the second-most generous with scholarship and grant money; and, its graduates earn third-most in the Big Ten Conference behind only Northwestern and Maryland.
As a result, University of Michigan graduates spend 31.8% of their paychecks on repaying student loans. By contrast, students at Pennsylvania State University spend 42 percent of their paychecks on student loan repayments.
“The typical college graduate pays back student loans for 21 years after graduation. The smaller that payment they’re making, the more money that’s available for their changing life goals — things like buying a home and saving for retirement,” Green said. “Students should consider all aspects of a school’s financial package before deeming it too expensive.”
The Big Ten…