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Lawrence Tech Produces Area's Highest ROI

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Lawrence Technological University ranked highest in the metropolitan Detroit three-county area and placed in the top third of a Bloomberg-Businessweek national survey on the increased earning power generated by a college bachelor’s degree.

Payscale Inc. of Seattle analyzed more than 23 million unique user profiles to determine the 30-year net return on investment in a college education. Only college graduates without advanced degrees were included in the survey.

Lawrence Tech was the second-highest-ranking private university and fifth overall among the Michigan colleges and universities covered by the survey. It ranked 17th nationally among private technological universities. MIT ranked first.

The Bloomberg-Businessweek survey found that the annualized return for a Lawrence Tech degree was 9.6 percent, compared to the 9.1 average for all colleges and universities in the survey. Payscale noted that the annual return from investing in the S&P 500 stock index has been 8.1 percent over the past 20 years.

Lawrence Tech was among the colleges where “investing in college costs, even at full price, has been competitive versus getting a job out of high school and putting the money in the market or treasury bonds,” according to Payscale.

Scholarships and other forms of financial aid can greatly increase the payoff on a college degree.

“It’s important and encouraging to note that the annualized return can be almost infinite for a student getting financial aid,” Payscale reported.

Historically, more than 70 percent of Lawrence Tech students have received some form of financial aid.

To arrive at the 30-year net ROI, Payscale calculated how much more a college’s graduates earned compared to high school graduates in 2010 dollars and then subtracted the average cost to attend that college in 2009. The survey was based on the assumption that college graduates took four to six years to earn a bachelor’s degree and did not work during that time. To compensate for those years out of the work force, the survey used average earnings of high school graduates for 34-36 years.

To arrive at the annual ROI, the earnings differential was divided by the cost and then annualized.

(c) 2010, WWJ Newsradio 950. All rights reserved.

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