Breaking it down: a simple guide to our methodology

Olga Knezevic
Olga Knezevic

Olga is an in-house editor and writer at She has previous experience as a higher education instructional designer and a university librarian. Olga is passionate about well-crafted sentences, Wikipedia rabbit holes, and the Oxford comma.

Breaking it down: a simple guide to our methodology

It has become a bit cliché to pose the question “Is college worth it?” (Though according to Google, 8,700 Americans type those very words into its search engine each month.) We all know college is getting more expensive, but getting a bachelor’s degree is still, in most cases, worth it. Put simply, the median earnings of a college graduate are around 60% higher than those of a high school graduate.

But not all colleges are created equal.

Our mission at Degreechoices is to show you which colleges are actually worth your money. We provide tools and information to help you compare schools and majors at the undergraduate and graduate level, on campus and online.

No methodology is perfect. For instance, we cannot account for how graduate earnings are affected by factors like generational wealth or bachelor’s students going straight to grad school instead of starting their careers. But we strive to create straightforward, (relatively) easy-to-replicate graduate earning and tuition cost formulas using data publicly released by the Department of Education. We explain exactly how we came up with our metrics in our methodology statement. Here, we’ll offer a simplified version.

Payback and EarningsPlus

The 2 main ingredients of our ranking methodology are payback and EarningsPlus. These combine into an economic score that we use to rank schools.


Payback allows you to compare how quickly you can earn back the money you invested in college with the extra money you are making thanks to your degree. Schools that are pretty affordable and have economically successful graduates tend to do best in terms of payback.

Payback is given in months/years. For example, at our top-ranked public university, CUNY City College, payback is under 6 months. That means your investment in a CUNY City College education will pay back in less than 6 months.


Payback gives you information about how valuable a degree from a particular college is compared to how much it will cost to study there.

Of course, you are not going to immediately use half a year’s salary to pay off your student debt. The calculation is based on the financial concept of payback periods – the amount of time it takes to recover the cost of an investment (also known as “breaking even”). Individuals and corporations use payback periods to decide whether or not to go through with an investment. The shorter the payback, the more attractive the investment. We apply the same concept to the money you invest in your education.

How did we arrive at that number?

To calculate a school’s payback, we divide the total cost of the school by the extra money you are making with a college degree versus just a high school diploma – your marginal earnings.

Total Cost ÷ Marginal Earnings = Payback

So, for CUNY City College:

$13,941* ÷ $31,955** = 0.4 years or “less than 6 months”


* Total cost = net annual cost ($2,805) times years to graduate (4.97)

** High school earnings in New York state are $23,786; bachelor’s earnings at CUNY City College are $55,741

what is payback

So why not just use payback to rank schools?

The trouble with using payback as the only metric for comparing colleges is that a school with very cheap tuition but whose graduates are low earners could look deceptively good.

  • For example, let’s say a college in New York state costs a total of $10,000 and its graduates go on to earn an average of $30,000.
  • Median high school earnings in New York are $23,786, so these graduates have marginal earnings of $6,214.
  • $10,000 (total cost of school) divided by $6,214 (marginal earnings) is 1.6.
  • So, the school would have a (pretty good) payback of 1.6 years despite its graduates earning 35% less than the average for all bachelor’s grads

Payback uses the concept of financial payback periods to tell you how good of an investment a college is. Although it’s expressed in months/years, it doesn’t tell you how quickly you will actually be student-debt-free. Instead, it tells you how quickly you’ll “break even” on your investment into a degree at a particular college.


EarningsPlus compares a college’s student earnings against an earnings benchmark. The benchmark is proportionally calculated according to how many in-state and out-of-state students a school has, comparing out-of-state student earnings with the national average and in-state student earnings with the state average. We also adjust the benchmark for each school according to proportions of students in different majors. That way, schools specializing in high-paying majors don’t unfairly overperform compared to schools with more diverse program offerings.


EarningsPlus gives you information about how much more graduates at a certain school earn compared to an average, or “benchmark”.

EarningsPlus is expressed as a dollar amount and can be a negative number.

  • An EarningsPlus of $10,000 means graduates from that school earn $10,000 above the benchmark.
  • An EarningsPlus of -$10,000 means students are earning $10,000 below the benchmark.

But wait, why EarningsPlus and not just earnings?

If we were to look at just earnings, we would have no benchmark to compare schools against. Benchmarking is a business concept, used to compare processes or products. A specific “indicator” is chosen – for example, cost per unit of measure – and used to measure performance. But at its most basic, a benchmark is a single point of reference against which many others can be compared.


EarningsPlus offers a true benchmark to compare schools against – we calculate an “average” and then see if schools are above or below that average. Because we also account for percentages of in-state and out-of-state students and the different majors a school offers, EarningsPlus is a more accurate measurement than looking at earnings alone.


EarningsPlus is a way to accurately compare graduate earnings at different colleges. We compare out-of-state student earnings with the national average and in-state student earnings with the state average. We also do an apples-to-apples comparison of students in the same major and cohort. We add all those numbers up to arrive at a school-level EarningsPlus. Don’t worry, we do the math, so you don’t have to.

So why not just use EarningsPlus to rank schools?

EarningsPlus on its own could skew the rankings of very expensive schools with high-earning graduates (the inverse of the issue with using just payback). High graduate earnings are great, but a good investment provides a balance between how much money you can make and how long it will take you to “break even”.

Economic score – the heart of our rankings

To help students strike that balance, we created our economic score (ES). ES combines EarningsPlus and payback into a single number – the lower the better. We use ES to rank schools. You can read a detailed explanation of how exactly it’s calculated on our main methodology page.

Final thoughts

We understand that choosing a school and a major are not just economic decisions. If you identify with a school’s unique mission or character, it may make sense to accept marginally poorer economic performance.

Additionally, the government data we use shows graduate earnings at a pretty early career stage. While a mechanical engineering graduate might earn more than the English major a few years out, there is no telling how someone’s career journey will pan out. Maybe that English major continues on to a master’s degree right after graduation. Maybe they get into online marketing instead and start earning serious money a few years later.

Our economic analysis of colleges and universities is one important tool to use when considering which school to attend. But the numbers refer to group averages, not individuals, and we cannot measure other factors that might be important to you!

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