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For the 2017-18 academic year, College Board sets the average cost-of-attendance for an in-state 4-year public institution at $25,290; if you are out-of-state and attending a public 4-year college or university, expect to pay roughly $40,940 each year.
The real kicker? Studying at a private four-year college will run you an average of $50,900 per year!
Last year, you may remember that LendEDU released our second annual CRRI study. Across-the-board, average tuition prices rose from that study to this one.
Now more than ever, parents and students are reaching deep into their pockets to help pay for college. College savings accounts, scholarships, grants, and financial aid can chip away at the cost, but eventually, many roads lead to student loans.
According to our student loan debt statistics, 60 percent of college graduates will walk away from campus with diplomas in one hand and student loan debt in the other. The average borrower from the Class of 2016 owed $27,975 at graduation, which can look like an insurmountable mountain for these young adults on entry level salaries or no salary at all.
While expensive, student loans can take the pipe-dream of a college education and turn it into reality. If used prudently, they give young students degrees that will enable them to pay back that debt with minimal trouble.
But how does one borrow student loans, a seemingly black-and-white concept, prudently? It starts with determining how much a desired college will cost and then determining a path to successful debt repayment.
At LendEDU, we aim to bring transparency to the student loan industry so that families and students can chart the most financially-sound course. That is why we released our first CRRI study, a report that gauged the risks and rewards of attending over 950 different U.S. colleges and universities.
And in 2018, LendEDU is bringing you our third annual College Risk-Reward Indicator (CRRI) study.
What Exactly is CRRI?
LendEDU has defined the risk of attending a respective 4-year college or university as the average student loan debt per graduate at that institution. The reward of attending that same 4-year college or university is the average early career pay for graduates of that respective school. Average early career pay for graduates can also be defined as the median salary for alumni with 0-5 years of work experience.
To calculate the CRRI for each school, the following formula was used:
College Risk-Reward Indicator =
Average Early Career Pay ($)
Average Student Loan Debt at Graduation ($)
Why Should You Consider CRRI?
When it comes to repaying one’s student loan debt, the years immediately succeeding graduation are the most pivotal in determining how successful repayment will be. This is because in the early stages of repayment, principal balances are at their highest and more interest will accrue than at any other time during the life of the loan (unless you simply never make any payments). For this reason, we used early career pay instead of a different metric, like mid-career pay.
The biggest key when it comes to being financially prosperous as a young college graduate is having a low student loan debt balance and a high early career pay. Contrarily, high levels of debt and low early career pay is a recipe for financial hardship.
As a young college graduate, being incapable of affording student debt will likely lead to missed payments, and perhaps, delinquency. The ramifications of this are long-lasting and far-reaching. A poor history of student loan repayment will make it tough for a young graduate to qualify for auto loans, mortgages, low-interest credit cards, and other financial products. In addition, high levels of educational debt will make it tough to invest or save for retirement.
LendEDU’s 2018 CRRI report has analyzed 994 private and public 4-year colleges and universities in the United States. Schools that recorded the highest CRRI values (College of the Ozarks – 102.48) should be considered as the best risk-adjusted choices for undergraduate students. On the other hand, institutions with the lowest CRRI values (Marylhurst University – .86) should be considered the worst risk-adjusted choices for prospective students.
LendEDU’s 2018 CRRI Rankings
In the table found below, the column header abbreviations represent the following:
- CRRI – College Risk-Reward Indicator value (see above)
- ECP – Early Career Pay (median salary for graduates from that school with 0-5 years experience)
- ADPG – Average Debt Per Graduate (average debt per graduate from that school)
- ST – School Type (public or private)
- St. – State (state where that school is located)
- SR – State Rank (a school’s rank within its state)
All data featured in this report derives from three main sources. First, the average debt per graduate figure was calculated using the newest Peterson’s financial aid dataset. Peterson’s data was reported through a voluntary survey to the colleges and universities listed in the report. The data is released on a one year delay and reflects the Class of 2016. Using Peterson’s dataset, LendEDU was able to calculate the average debt per borrower figure at each school.
After finding the average debt per borrower figure for each school, LendEDU was then able to find the average debt per graduate figure. That figure was calculated by taking the average debt per borrower figure and multiplying it by the percentage of graduates from each respective school that graduated with student loan debt. Average debt per graduate was used instead of average debt per borrower in order to factor in the schools where many graduates do not leave campus with student loan debt.
LendEDU then used PayScale’s College Salary Report 2017-2018 to find the median salary for graduates from each school with 0-5 years experience. That median salary figure for each respective school was then divided from the average debt per graduate figure for the same school. The resulting number was LendEDU’s College Risk-Reward Indicator (CRRI) figure.
See more of LendEDU’s Research
Author: Mike Brown