<p>The 42K is for the Business School but doesn’t it seem like a lot to dish out for a starting salary of 42K?</p>
<p>How do you know when the return on investment isn’t that good?!</p>
<p>When you look at numbers like the ones you provided you have to question the return on investment.</p>
<p>Do you have starting salary information for other schools?</p>
<p>If I assume the actual cost of Miami is $40k, and invest $160,000 at 6% after-tax compounded rate of return for 40 years, I end up with $1,647,715. At the difference between working at $42k vs. working as, say, a construction worker and not going to college at all, over 40 years I would never make up the difference. So looked at that way, it is a clearly a bad investment, especially if I started as a construction worker immediately.</p>
<p>Another way to look at it would be to compare the cost of the business school at Florida State (maximum $20k) vs. Miami 40k. Taking the $80k and investing it again at 6% post-tax compounded over 40 years would net $823,857.50. That would be a very large amount of dough to make up in the “value-added” of Miami v. Florida State.</p>
<p>The only way it adds up to a good return on investment is if, over time (and having nothing to do with the starting salary), the opportunities occurring because one attended Miami rather than Florida State over time made up the difference. It is possible, but I doubt you could count on it.</p>
<p>In other words, as an investment, it is clearly “iffy” at best. But might be a great place to go to school!</p>
<p>I presume you got the salary info from the Business Week article that was linked on the forum. It looked to me like the salaries were mostly in the 40K range except for the top 10 or so schools.</p>
<p>So, let’s say you go to a state school where you pay 10K per year instead of 35K per year. That means that you’d be paying 100K more for your U. of Miami education. Maybe graduates from your state school only start at 35K instead of 40K. If so, it would take 20 years for you to break even if you attended U. of Miami (assuming that both jobs got the same raises over time).</p>
<p>One Hundred Thousand Dollars…that’s a <em>whole</em> lot of money. Would it maybe be better spent to send you to a great graduate program after getting your undergrad degree at a state school?</p>
<p>Mini, </p>
<p>How’s your calculator at a 5% after tax return? 4%?</p>
<p>Cute on the nurses making more than doctors in 20 years. :)</p>
<p>“One Hundred Thousand Dollars…that’s a <em>whole</em> lot of money. Would it maybe be better spent to send you to a great graduate program after getting your undergrad degree at a state school?”</p>
<p>Of course it would, but then you would be stuck with going to a state school with the commoners. :)</p>
<p>5% - $1,167,683
4% - $786,212</p>
<p>As “investments”, prestige undergraduate colleges for people who aren’t “prestige people” to begin with are very, very iffy investments. They might work out, but relative to their investment value, I doubt they do more than half the time.</p>
<p>But there are plenty of other reasons to attend them (especially if you can get someone else to pay for it!)</p>
<p>“(especially if you can get someone else to pay for it!)” 
:)</p>
<p>:o indeed ;)</p>
<p>And what I am overly curious about is that ratio of starting salaries and the total cost of college. When did it get so far out of whack? 30 years ago, costs for a private college wa around $6,000 (excluding the top tier perhaps) and a good paying job was $16-18,000. today it is 35-40,000 and a new job is hopefully 40,000. WOW!</p>
<p>30 years ago (this is my reunion year so I’m sure of that date), there was a huge commotion when Johns Hopkins raised its tuition to $3,400 a year. My starting salary as an engineer six months later (after I rode my bicycle across the country 
) was $13,030. That’s 3.8x tuition.</p>
<p>I am struggling to think of a job that will pay my son $127,680 annually upon his graduation in a few years. (But no, I don’t begrudge him the experience at MIT.) How in the world <em>did</em> this get so out of whack??</p>
<p>As an investment (relative to alternative engineering degrees), very iffy! But hey, what else were you gonna spend the money on? Could be worse! ;)</p>
<p>“How in the world <em>did</em> this get so out of whack??”</p>
<p>Supply and demand, mootmom. Supply and demand. MIT could probably raise tuition to $100K per year and still attract enough high stat full payors to fill a class…or two. Obviously, some slots must be set aside for low income (NOT necessarily middle income) high stat kids who will need to be subsidized to balance a class. And it is clear that tuition from full payors does not subsidize tuition from non or partial payors, but, instead goes into the operating budget for the undergraduate school. Fin aid money comes from endowments. But, as long as there are those students out there whose parents will pay full freight, the prices will rise.</p>