Degree ROI Calculator: Is a College Degree Worth It?

How it works

Cost = tuition + Σ (pay without degree − part-time pay) over the study years + loan interest · Gain in work year i = completion × [S₀((1+g)(1+b))^(i−1) − F(1+b)^(y+i−1)] × (1 − tax) · NPV = Σ gains ÷ (1+d)^t − Σ costs ÷ (1+d)^t · IRR = the rate where NPV = 0 · Payback = years until cumulative gain ≥ cost

A degree is an investment: you pay tuition and give up the wages you could have earned while studying, and in return you expect higher pay for the rest of your career. For most students the lost earnings are the larger cost, not the fees. The calculator grows both career paths at a base rate (3% by default, including inflation), adds the extra raise you expect from the degree, and compares them year by year. Because a dollar earned 30 years from now is worth less than a dollar today, the main result is the net present value (NPV): every year’s cost and gain is discounted at your discount rate (5% by default, about 3% real plus inflation, the real rate used by FREOPP in its ROI study). The undiscounted lifetime gain is shown too, but it flatters long careers. The internal rate of return is the yearly return the degree earns on what you put in; compare it with what the money could earn elsewhere. Under More options you can add student loans (interest accrues while in school, then fixed monthly payments; 6.52% is the 2026–27 federal undergraduate rate), the chance of finishing (incomplete degrees rarely raise pay), and an average tax rate. The model credits all the pay difference to the degree and uses one salary path; field of study matters far more than the institution, so use salary data for your intended field.

Worked example

With the defaults: $60,000 tuition over 4 years, $32,000 pay without the degree (growing 3% a year) and $8,000 earned part-time. Lost earnings are (32,000 − 8,000) + (32,960 − 8,000) + (33,949 − 8,000) + (34,967 − 8,000) = $101,876, so the total cost is $161,876. The graduate starts on $52,000 against $36,016 without the degree, an uplift of $15,984 (44%), and with a 1% extra raise the gap widens each year. Over 40 years the extra pay adds up to $2,260,752, an undiscounted net gain of $2,098,876, and the cost is recovered 8.1 years after graduating. Discounted at 5%, the gains are worth $572,700 today and the study costs $143,287, so the net present value is $429,413. The internal rate of return is 13.5% a year, and the degree would still break even with a starting salary of $35,674.

Sources: BLS — Education pays, 2025 (median weekly earnings and unemployment by education) · FSA — Direct Loan interest rates for 1 July 2026 – 30 June 2027 · FREOPP — How we calculated the return on investment of a college degree · College Board — Trends in College Pricing 2025 highlights · NCES Fast Facts — undergraduate graduation rates

Frequently asked questions