Overview of DIY Money
This episode of DIY Money answers a listener question about how to calculate the return on investment (ROI) for college — specifically for a brother pursuing nursing who’s considering transferring between schools. The hosts mix practical financial math with lived experience and broader life advice: how to run the numbers, what non‑monetary factors to include, and concrete suggestions for a career like nursing where credentialing matters more than school prestige.
Episode structure
- Brief banter and running/taper anecdote to open the episode.
- Listener question (Alex from California) about calculating college ROI.
- Two hosts respond: a financial-advisor perspective (quantitative) and a life/career perspective (qualitative).
- Specific comments about nursing and recommendations for affordable paths.
- Closing reminders and sponsor spots.
Key takeaways
- ROI for college is calculable and largely straightforward: compare future earnings uplift to total costs (tuition + living + opportunity cost + financing).
- College is not required for everyone; judge by career needs and personal preferences.
- Student loans can be sensible if used with a plan (degree tied to an income bump or required credential).
- For professions with standardized credentials (e.g., registered nurse), the most affordable accredited route usually makes the most sense.
- Consider the non‑monetary ROI: independence, personal growth, network, and the work you’ll enjoy doing for 30–40 years.
How to calculate college ROI — practical steps
- Estimate current earnings without degree (what a high‑school graduate would earn).
- Estimate post‑degree earnings (median salary for the target career — use validated sources).
- Calculate the annual income delta: post‑degree salary minus pre‑degree salary.
- Total the true cost of education:
- Tuition, fees, books, supplies
- Living expenses (if moving away)
- Opportunity cost (wages forgone while studying)
- Financing costs (interest on loans)
- Choose a time horizon (e.g., 30 years of working) and a discount rate.
- Compute:
- Payback period = total cost / annual income delta
- Net Present Value or present value of additional lifetime earnings vs. cost
- Run sensitivity analyses (different salary outcomes, loan interest, length of career).
- Use online calculators or spreadsheet templates for PV/NPV if needed.
Data sources and tools to use
- U.S. Department of Education College Scorecard (earnings & debt by school)
- Bureau of Labor Statistics (occupation salaries & projections)
- School financial aid offices and program cost breakdowns
- Online ROI or student loan calculators (present value/NPV tools)
Non‑monetary factors to weigh
- Personal growth and independence gained in college
- Career satisfaction: you’ll likely work 30–40 years — prioritize something you enjoy
- Networking, internships, and credentials that open doors
- Quality of life factors (benefits, pensions for certain public jobs, vacation/summers)
- Flexibility to change careers later (and the cost of switching)
Specific advice for nursing (the brother’s situation)
- Nursing is a credentials-driven field: passing licensure (NCLEX-RN) and accreditation matter more than school brand.
- If the RN credential is the goal, prioritize accredited, lower‑cost programs (community college → ADN, then RN, or an affordable BSN path).
- Compare total cost vs. likely starting RN salary in your area; many employers pay similarly regardless of undergraduate institution.
- Investigate accelerated programs, employer-sponsored tuition, scholarships, and local clinical partnerships.
- Avoid taking on large debt for marginal school prestige when the credential and licensure are the primary outcome.
Hosts’ viewpoints (summarized)
- Financial-advisor view: Run the math. Use PV/NPV to compare lifetime earnings to cost. Student loans are acceptable if tied to a clear plan and ROI.
- Life/career view: Start with "what job do I want to do?" — then determine the path. Consider the return on your life (satisfaction, fit) not just dollars.
- Parent perspective: College can be a valuable season for growth and independence, but it doesn’t justify excessive borrowing.
Action items / Recommendations for Alex and his brother
- Run a numeric ROI analysis using the steps above (payback period + NPV). Use school- and occupation-specific data.
- Compare options: stay at Cal State vs. transfer vs. community college + transfer vs. private school.
- Confirm program accreditation and NCLEX pass rates for nursing schools being considered.
- Estimate monthly loan payments under realistic borrowing scenarios.
- Look into scholarships, grants, employer tuition assistance, and cheaper pathways to RN (ADN → BSN progression).
- Factor in what kind of nursing role and salary he seeks (ICU, travel nurse, management, etc.) and regional pay differences.
- Consider the quality‑of‑life and long‑term career satisfaction alongside the ROI math.
Notable quotes
- "If that ROI... demands a degree, you should pursue it."
- "I wouldn't even start with the math. Start with the fact that whatever career you choose, you will most likely be working for 30 to 40 years of your life. Find something you want to do and then go figure out the path to get there."
- "For nursing: get your degree from the most affordable place possible and then become a registered nurse."
This summary should help Alex and other listeners quickly decide which practical and personal factors to include when evaluating whether college (or transferring) is the right move.