How to Estimate How Much a Degree is Worth - Earnest | Earnest

How to Estimate How Much a Degree is Worth

By Erica Gellerman | Published on October 21, 2025

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If you’re thinking about going to college, the total cost listed in those college brochures might give you sticker shock. A common reply to fear about how much your higher education will cost is, “It’ll be worth it.”

But how do you actually estimate that the degree you’re going to spend years earning and tens (or hundreds) of thousands of dollars on is actually going to pay off as a college graduate? Let’s walk through some strategies to help you put a dollar value on that diploma.

Value of an education: What the data says

Even though the cost of college is increasing, the data points to it still being worth the cost.

Data from the Bureau of Labor Statistics shows that with more education, Americans earn more money. Looking at median weekly earnings for people 25 and older, those who complete a bachelor’s degree earn $594 more per week compared to other workers.

Research from the National Center for Education Statistics also supports the argument that education is still worth it, despite the rising costs of college in America. The median earnings of a Bachelor’s degree holder were 59% higher than those of high school graduates.

That data makes it clear that on average, a college education will increase your earning power and can help you get a higher salary. But with the added cost of college tuition, is a college degree worth it?

How much should you spend on college?

Deciding how much a four-year degree is worth to you (and how much you want to spend) is a personal decision. There’s no easy way to predict whether it will impact your future finances and by how much. While looking at general information is helpful to give you a guideline to estimating the value of college, it’s a good idea to take the time to do your own assessment.

Here are some tools to help you do just that.

Net price of college

The cost of college is a topic of many conversations because it has more than doubled over the last 30 years in the United States. Recent data showed that the average cost to attend a four-year public college was $27,416. The cost to attend a private non-profit was $58,628 and a private for-profit was $33,574.

Those costs can be a good place to start when assessing the value of a college education, but even better would be to get an estimate of the net price of education. The net price is the cost per year after taking into account scholarships and grants. In some cases, this can bring down the price tag for college significantly.

To help you get an estimate of the net price you can expect to pay, you can search the net price calculator by school. You may find that depending on your financial situation, attending a school with higher tuition costs might be just as affordable as a lower-priced college.

By getting the net price, you’ll get a better estimate of how much a degree will cost you at each college you’re considering.

Average salary after graduation for college grads

Now that you have an idea of how much college will cost, it’s time to figure out how much that will help you make when you enter the job market. If you’re trying to determine how much to spend on your education — and how much to borrow in student loans — getting a good estimate of the average salary you can expect and your earning potential is important.

You can explore a list of the best-paying college majors and use the Career Earnings by College Major tool from the Hamilton Project. With the tool, you can search by major and find the median annual earnings for each major.

Another option is to use data from PayScale. Using their tool you can find the average salary for someone who graduated with a BA in Marketing vs a BS in Computer Science. With both of these tools, it’s good to keep in mind that they’re just starting points. Pay and your lifetime earnings will vary by many factors, including your local labor market and competition from other educated workers.

To get an even more accurate picture, you can contact professionals working in your major. Ask how they like their jobs and whether they feel they are well compensated.

If you have a short-list of colleges you’d like to attend, you may even find better data to estimate average full-time salaries. For example, Duke University lists average salaries for graduate placements, and the University of Colorado Boulder Engineering School reports a medium starting salary of $73,700 for graduates with Bachelor’s degrees.

Return on investment

Even with that data, it can be difficult to get an estimate of what the value of your degree might be. Luckily, there’s more research that can help.

The Center on Education and the Workforce at Georgetown University offers a resource for calculating the return on investment (ROI) of 4,500 colleges. You can look up a school by name to see where the net present value of the degree ranks, compared to other colleges. You’ll also be able to see the graduate rate, which can seriously impact the ROI you can expect to receive from a school.

ROI is an economic value most associated with stock market investing or home buying, but it could help students decide how much student loan debt they could pay off, or if they should go back for that Master’s degree.

How much should you borrow?

If, after doing your own assessment, you decide that attending college is worth the cost, there is still the concern of paying for it. Few college students have unlimited funds to draw from to pay for college. While many students need to take on debt, how much is too much? Whatever you borrow you will need to repay, with interest, and you don’t want that student debt to be a strain on your finances for years to come.

Deciding how much to borrow is a personal decision and it depends on a number of factors. But the CFPB gives a rough guideline to follow: don’t borrow more than you expect to earn as a starting salary when you leave school.

For example, the approximate starting salary in 2023 was $56,000 per year. The federal government says that a student loan payment that’s 8% of your monthly income is a low student loan burden, 8 – 14% is a medium student loan burden, and anything over 14% is considered a high student loan burden. Using the CFPB student debt worksheet, you can calculate how large of a payment you can afford, using the average salary in your chosen field. This is only an estimate, but it will give you a more realistic idea of what you can cover without risking your future finances.

One way to find out if your future loan payments will be within your budget is to get an interest rate estimate from the lender you plan to apply with. The federal government publishes their rates and you can use a student loan repayment calculator to plug in your rate and term to get an approximate estimate of your total loan cost and monthly payment.

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If you need a private student loan on top of federal financial aid and federal loans, you’ll want to get a rate estimate from your lender. At Earnest, you can get a rate estimate in a few minutes and it won’t impact your credit score.

Ultimately, deciding whether school is worthwhile and how much you should spend is a very personal and important financial decision. But there are plenty of tools and calculators that can help you start exploring these choices.

About the Author

Erica Gellerman

Erica Gellerman is an, MBA, CPA, and founder of The Worth Project.

Disclaimer

This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.