Overview of DIY Money — “Return on Investment: College”
In this episode, the hosts respond to a listener asking how to calculate the return on investment (ROI) of college, especially for someone pursuing nursing and considering a transfer. Their main point is that while you can attempt the math, the decision is often more about life direction, career fit, and personal development than a clean financial formula. They discuss how to think about college costs, future earnings, and alternative paths that can reduce debt or improve value.
Main Question: Can You Calculate College ROI?
The listener’s question centered on how to evaluate whether college is “worth it,” including:
- How to estimate school expenses
- How to project future income
- Whether non-financial benefits should be included
- Whether there are better alternatives to a traditional university path
The hosts’ answer: you can try, but it’s hard to do with confidence because both costs and outcomes are too variable.
Key Takeaways
1. The math is possible, but imperfect
The hosts say you can build a rough ROI model by comparing:
- Total cost of college
- Estimated future earnings with a degree
- Estimated earnings without the degree
- The present value of future income
But they caution that the assumptions are shaky, since career paths, salaries, and life plans change.
2. Career choice matters more than the school price tag
They argue that ROI is easiest to see when comparing different fields, not just different schools.
Examples they gave:
- A high-cost liberal arts degree with low expected pay may produce poor ROI
- An engineering degree with similar cost may lead to much higher earnings
Their point: field of study and career path usually matter more than prestige alone.
3. College offers value beyond salary
The hosts strongly emphasized that college can provide benefits that are hard to monetize, such as:
- Learning independence
- Managing time and responsibilities
- Living away from home
- Building discipline
- Maturing socially and emotionally
They view these as real returns, even if they don’t show up directly in a paycheck.
4. Start with life goals, not spreadsheets
One host said the first question should be:
- What kind of life do you want?
- What kind of work do you want to do?
- Do you need a degree for that?
Their advice is to think qualitatively first, then use ROI math as a second step.
Ways to Make College More Affordable
The hosts offered several practical ways students can reduce costs and improve ROI:
- Community college first if you’re unsure about a four-year school
- Scholarships — they note these are more plentiful than many people realize
- ROTC / military service as a way to pay for school and gain career experience
- Working in school, such as being an RA to cover room and board
- Gap years with structure: if taking time off, work and pay rent rather than drifting
Best Use of ROI Thinking
They suggest ROI calculations are most useful when:
- Comparing one career path to another
- Deciding whether college is needed at all
- Evaluating whether a more expensive school is justified
- Planning around long-term financial goals like retirement
But if the student already knows the dream job and needs a degree to get there, the ROI question becomes less important than simply choosing the most practical route.
Notable Insight
One of the strongest themes in the episode is that the “best” educational choice is not always the one with the highest salary outcome. The hosts encourage listeners to think about fulfillment, maturity, and long-term life design—not just earnings.
They also close with a broader financial principle:
“Live on less than you make, invest the rest, and do so for a very long time.”
Bottom Line
The episode’s conclusion is that college ROI is real, but difficult to measure precisely. The smarter approach is to:
- Decide what kind of life and work you want
- Check whether college is required
- Choose the most affordable path that gets you there
- Factor in both financial and personal growth benefits