ROI Score
CollegeROI's proprietary rating from 0-100 (graded A-F) that measures how well a school's graduates' earnings justify their student debt burden.
Detailed Explanation
The ROI Score is the core metric of CollegeROI, designed to answer one question: does this degree pay off? The score ranges from 0 to 100 and translates to letter grades: A (80-100), B (65-79), C (50-64), D (35-49), and F (0-34). The score is calculated from four weighted factors: debt-to-earnings ratio (40% weight), which measures how manageable the debt load is relative to post-graduation earnings; graduation rate (25% weight), because a degree you never finish has infinite negative ROI; earnings premium (20% weight), comparing graduates' earnings to the median for high school graduates; and retention rate (15% weight), as an indicator of institutional quality and student satisfaction. Each factor is normalized to a 0-100 scale, then combined using the weighted formula. The ROI Score is calculated at the school-major level when program-specific data is available, and at the school level using aggregate data otherwise. An ROI Score of A indicates strong financial outcomes with debt well below earnings, while an F indicates graduates are likely to struggle with repayment.
Related Terms
Debt-to-Earnings Ratio
The ratio of a graduate's total student loan debt to their annual earnings after graduation, used to assess whether a degree's cost is proportionate to its financial return.
Graduation Rate
The percentage of first-time, full-time students who complete their degree within 150% of the expected time (six years for a four-year degree).
Earnings Premium
The additional income a college graduate earns compared to a worker with only a high school diploma, measuring the financial value added by a degree.
Retention Rate
The percentage of first-time students who return to the same institution for their second year, an early indicator of student satisfaction and institutional quality.
Frequently Asked Questions
What is roi score?
CollegeROI's proprietary rating from 0-100 (graded A-F) that measures how well a school's graduates' earnings justify their student debt burden.
Why does roi score matter for college ROI?
The ROI Score is the core metric of CollegeROI, designed to answer one question: does this degree pay off? The score ranges from 0 to 100 and translates to letter grades: A (80-100), B (65-79), C (50-64), D (35-49), and F (0-34). The score is calculated from four weighted factors: debt-to-earnings ratio (40% weight), which measures how manageable the debt load is relative to post-graduation earnings; graduation rate (25% weight), because a degree you never finish has infinite negative ROI; earnings premium (20% weight), comparing graduates' earnings to the median for high school graduates; and retention rate (15% weight), as an indicator of institutional quality and student satisfaction. Each factor is normalized to a 0-100 scale, then combined using the weighted formula.