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By William Hamilton
PBN Staff Writer
PROVIDENCE – A Brown University education is a big investment, but the payoff is among the best in the country, according to a Bloomberg Businessweek study of the career earnings of college graduates.
Brown ranked 24th in a list of 554 U.S. schools in terms of the net return on investment, with a 30-year ROI of $1.14 million for a Brown graduate – or an 11.3 percent annualized net ROI — based on data provided by PayScale Inc.
The Massachusetts Institute of Technology topped the list with a 30-year net ROI of $1.69 million – or 12.6 percent annualized – according to Businessweek, which published the findings online this week.
Two local universities landed on the magazine’s list of schools it said featured high tuition but low return on investment: Roger Williams University was No. 12 while Salve Regina University came in at 16th.
Roger Williams’ national ROI ranking was 463rd, and its graduates' 30-year net ROI stood at $296,000, according to PayScale data. That put the annualized net at 7.7 percent.
Meanwhile, Salve’s national ROI ranking was 392nd, with a 30-year net ROI of $345,500, or 7.9 percent annualized.
In separate comments to the magazine, both institutions said using data that stretches back 30 years downplays more recent “transformations” at the schools.
Bloomberg Businessweek said the research was based on self-reported compensation data collected through PayScale's online pay comparison tools.
PayScale used pay reports from 1.4 million college graduates with no advanced degrees to calculate each school’s ROI.
But the study resulted in a far lower estimate on return on investment in a college education in part because of the way it calculated the costs.
The study didn’t assume that everyone graduates in four years, and it considered that some never graduate at all.
Businessweek said the net ROI for graduates only was $627,239, but adjusted for the average graduation rate of 58 percent, the average net ROI dropped to $393,574, with an annualized rate of 9 percent.
Aside from Brown University, no other local college or university appeared in the top 100.
The following is a listing how local schools fared in the Bloomberg Businessweek ranking, a graduate’s average 30-year net ROI and annualized percentage rate. (Although the study examined 554 schools, rankings go higher because in-state and out-of-state graduates at state schools were considered separately. Bryant University and Wheaton College were not ranked.)