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How to make college a savvy ROI consumer purchase

How to make college a savvy consumer purchase
How to make college a savvy consumer purchase
Photo by Kevork Djansezian/Getty Images

PayScale released its 2014 College Return on Investment (ROI) Report on Wednesday just before the April 1 deadline for colleges to send their answers to their college-bound applicants for admission. Parents and students have another information tool to make college choice a savvy consumer purchase.

2014 College Return on Investment (ROI) Report
PayScale’s college ROI Report seeks to measure the value of a college education. The Report ranks U.S. colleges and universities based on their total cost and alumni earnings. According to the Report, families may “(f)ind the best returns on investment by school type, location, and major.”

Parents and students may sort school data by:

  • ROI 20 year net or annual
  • With or without Financial Aid
  • Housing costs on campus, off campus or off campus with family
  • Location by state
  • Tuition type public in-state, public out-of-state, private
  • Category of art, music & design, business, sports, religious, engineering, liberal arts, party, sober, Ivy League, or research
  • ROIs for majors

Savvy college purchase
Higher education is one of the best investments families may provide for their children’s future. With college costs increasing, financial aid diminishing, economy and job market trying to recover, finding the best school for the college-bound is a must. Colleges have the power to decide whether or not to offer admission but students have the power to decide which school to attend from those offering admission. The Student-College power shift describes which party has the power at the beginning, middle and end of the college process. Choosing wisely means picking a school that offers the best chance for student success in college and beyond,

Parents and students may review:

  • Costs The cost of attendance (COA) includes tuition and fees, books and supplies, room and board, transportation and personal expenses. However, the total cost to families also include start-up costs to outfit a dorm room, additional program/activity expenses, borrowing costs for loans, and travel expenses incurred from family visits. Together these are the POCS COA. When doing the math, be sure to calculate costs for every school year needed to earn the diploma which often runs four to six years or beyond.
  • Free money Schools offer financial aid awards to students to help them pay their college bills and entice them to attend. The financial need of the student and his family as calculated by financial aid forms is the basis of need-based awards. Some schools meet 100 per cent of student need but many do not. The size of merit awards based on student talent and ability may be an indication of how much the college wants the student to attend. Grants and scholarships are free money that does not have to be paid back. Students should check the strings attached and if the award is renewable for each year of college attendance.
  • Loans In addition to grants and scholarships, student loans are usually offered as part of the financial aid package. To accurately compare their college costs at different schools, families should be savvy about loans. Loans do not reduce the college bill but are a way of paying the bill while increasing it with borrowing costs.
  • ROI To help chart future career and lifestyle, it helps to look at student debt, salary, costs of living, and ROI. Using PayScale’s Report, according to The Atlantic article, Which college—and which major—will make you richest?, Harvey Mudd College is ranked highest for it’s 20 year net ROI of over a million dollars. However, the University of Virginia for in-state students takes first place for a 17.6 percent annualized ROI. “But majors matter, too: That's why smaller schools with high concentrations of computer science and engineering students near large cities with thriving technology scenes (Harvey Mudd, Cal Tech, Stevens, NYU Poly) dominate the list,” analyzed The Atlantic.
  • Opportunities Important factors to consider are the curriculum, programs and activities, fellow students, college staff and local community, networking, internship, placement and other aid opportunities.

To get the best bang for their educational buck that will afford their desired future lifestyle and opportunities, students should choose a school considering total POCS COA, income potential of their major and ability to pay back any loans. To receive notification about future articles of concern to parents of the college-bound, click on "Subscribe" near the above photos and go to POCSmom’s website. Connect via Twitter and in the comments section about how to make college a savvy consumer purchase.

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