The U.S. Career Institute recently published the American College ROI Index, which analyzes the estimated 10-year return on investment (ROI) of four-year colleges and universities in the United States.
The index’s data was calculated by comparing the median annual wage for a U.S. high school graduate with no college experience ($49,500) to the median annual salary of each college’s bachelor’s degree recipients 10 years after graduating. For a college’s bachelor’s degree to generate a positive financial return, its attendees must out-earn that $49,500 baseline. For each college and university, the index measures the annual career premium generated by its bachelor’s degree, the 10-year ROI (the percentage of the total educational cost recouped over a decade of working), and the theoretical timeline required for the annual career premium to fully pay off the total net cost of the degree.
According to the index, there are no HBCUs in the country that have a positive median 10-year ROI for their bachelor’s degrees when taking into account the colleges’ average four-year true cost of attending (including both tuition and room and board).
Hampton University in Virginia comes the closest to offering a net-zero 10-year ROI. For Hampton bachelor’s degree recipients, the median 10-year salary is $59,159, resulting in an annual career premium of $9,659 compared to the median 10-year salary of a high school graduate with no college education. Thus, based on the index’s estimated four-year true cost of attending Hampton ($101,276), it would take the median-earning Hampton undergraduate alum 10.5 years to pay back the money spent on attending Hampton.
Howard University undergraduate alumni have by far the highest annual career premiums of any HBCU, at $13,566. However, Howard also has the highest four-year true cost of attending ($202,156). Thus, it would take the median-earning Howard undergraduate alum 14.9 years to pay back the money spent on attending Howard.
Only five other HBCUs’ alums have a median annual career premium above zero dollars: Bowie State University in Maryland ($5,037), Xavier University of Louisiana ($2,684), Morehouse College in Atlanta ($3,389), Morgan State University in Baltimore ($1,198), and Tuskegee University in Alabama ($141). Notably, Spelman College in Atlanta — one of the country’s top-ranked and most selective HBCUs — is not included in the dataset.
