By Maryam Noor, Catherine Morris, and Ban Cheah
Prospective college students may think that a college degree from a state’s flagship public institution yields a significantly higher payoff than other public universities in that state. However, our newly updated and frequently cited return on investment (ROI) data tool reveals that comparable returns are attainable from a larger pool of public universities.
Take Texas as a starting point. The University of Texas at Austin (UT Austin) is one of the most selective public universities in the nation, partly due to a policy that guarantees admission to high school students in Texas who graduate in the top 6 percent of their respective classes. This long-standing policy can leave many high-achieving students outside of the top 6 percent of their classes feeling disgruntled. However, the financial returns of attending UT Austin are not very different from those at other public universities in Texas. The 40-year ROI of Texas A&M-College Station ($2.46 million)—one of the state’s two land-grant universities—and UT Dallas ($2.26 million)—a lesser known campus in the University of Texas system—are not far behind UT Austin’s ($2.53 million).
Being a state flagship carries a lot of attention and prestige, but from a purely financial outlook, students may be overlooking the value of regional public universities. Regional public institutions are the workhorses of higher education, enrolling about 70 percent of all students in the US who attend four-year institutions. Satellite campuses and regional public universities also play a key role in educational equity as they often enroll more students from marginalized communities than selective colleges and universities. These institutions provide opportunities for students to earn a degree without incurring the high costs typically associated with their larger counterparts, often a key determinant in their high ROI.
For example, both the regional University of Massachusetts-Lowell and the state’s flagship university—the University of Massachusetts–Amherst—have 40-year ROI values of $2.28 million. In New York, Stony Brook University ($2.47 million) and the University at Buffalo ($2.29 million) are recognized as the state’s flagship universities, but they are not the only public universities in the state with 40-year ROI figures higher than $2 million. SUNY College at Geneseo, in rural western New York, is a regional public university that also boasts a high 40-year ROI for students ($2.09 million).
These and other insights on college value can be gleaned from our newly updated ROI data tool. For example, the tool allows users to investigate returns across different time frames—10-, 15-, 20-, 30-, and 40-years—enabling prospective students to consider their earnings potential at different points and across the full arc of their careers.
The ROI of different credentials can vary widely at different timeframes. For instance, the median 10-year ROI of public institutions that predominantly offer certificates ($233,000) and associate’s degrees ($232,000) surpass those of public colleges and universities that predominantly offer bachelor’s degrees ($174,000). This is because, in our ROI calculations, we have assumed that certificates and associate’s degrees require less time to complete than bachelor’s degrees. Students who attend institutions that predominantly offer these credentials are presumably working and earning a salary faster than their counterparts at public four-year colleges and universities.
That said, the ROI of public colleges and universities that predominantly grant bachelor’s degrees generally catches up with the ROI of two-year colleges over the long run. ROI values at the 40-year horizon reinforce this story: public bachelor’s degree-granting institutions have a median 40-year ROI of nearly $1.8 million compared to the median 40-year ROI for public institutions that primarily grant associate’s degrees and certificates of $1.43 and $1.37 million respectively.
Prospective students may also want to consider the cost of living as an unseen variable that affects ROI. For example, while the gap in 40-year ROI between the University of Washington-Seattle ($2.62 million) and its land-grant counterpart, Washington State University ($2.28 million), is greater than $300,000, consider that UW-Seattle graduates often find jobs and build their lives in the greater Seattle area, the state’s most expensive region. Washington State University, meanwhile, is in Pullman, in eastern Washington, where local residents, including graduates, enjoy a much lower cost of living.
Regional public universities face many of the same challenges besetting the rest of higher education, namely, the college confidence crisis and the continued decline in the population of 18-year-olds—the traditional age of college freshmen. Declining enrollment, in particular, spells trouble for regional public universities. Unlike larger state schools or wealthier private universities, regional public institutions have small endowments and limited funds to draw from. Therefore, they rely heavily on tuition revenue streams to maintain operations.
In 2024, colleges in the US closed at a pace of roughly one per week, and while the vast majority of them were small private colleges, the alarm bells are ringing for regional public institutions as many were forced to cut programs and staff to keep their doors open. Sonoma State University and the University of New Orleans are some of the most recent examples of regional public universities making significant cuts, impacting not only the colleges themselves but also the local communities they serve. Beyond budget cuts, Pennsylvania State University recently announced that it plans to close several of its satellite campuses due to enrollment declines. Unfortunately, these are unlikely to be the last.
Despite the ongoing confidence crisis that higher education faces, our research has consistently shown that a bachelor’s degree is still the most stable path toward a secure financial future. Students should not overlook regional public universities as they weigh their college options. While these schools may not have the same cachet or the same level of resources as state flagships, they clearly punch well above their weight in terms of delivering economic opportunity at a lower cost.
* One important caveat to these numbers: our cost analysis reflects the average out-of-pocket costs for in-state students. Tuition prices—and therefore overall costs—are generally higher for out-of-state students. Students weighing their options should keep this cost differential in mind.
