Report links less aid to student investment return

Wook Lee/Staff

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Though UC Berkeley ranks in the top five schools in the nation for student return on college investment, accounting for student financial aid packages pushes the campus out of the top-five ranking, according to a report released by PayScale, Inc.

When students attend UC Berkeley for the in-state "list price," the return on investment ranks in the top five in the nation, according to the April 7 report. However, when financial aid is accounted for - when students attend for the "discounted price" - UC Berkeley falls out of the top five and is replaced by several private schools that can provide more financial aid for their students and by public schools whose students graduate at a faster pace.

The report does not take into account students who go on to obtain graduate and other professional degrees.

PayScale, an online database for career compensation reports, calculated returns on investment following college graduation by looking at how much graduates are paid compared to their schools' average cost of attendance.

"(UC) Berkeley does really well with returns on investment because (UC) Berkeley graduates tend to be really successful and receive high wages, but they're also public, so their cost for attending isn't as high," said Katie Bardaro, PayScale senior research analyst.

However, once financial aid awards are included in the study, UC Berkeley drops to number 14.

Private schools, such as Harvard University and Princeton University, move up in the rankings because large endowments allow these institutions to provide their students with a better "discounted" price, therefore lowering the cost for students, who also on average tend to have higher salaries than UC Berkeley graduates.

"The private schools that move into the top (five) for Annualized (returns on investments) once we account for financial aid are ones of good reputation that spurn out graduates that are typically paid a relatively high amount," said PayScale spokesperson Steven Gottlieb in an email.

According to Carol Stewart, an institutional researcher at UC Berkeley's Financial Aid and Scholarships Office, a decrease in funding for financial aid has accounted for a slight decline in enrollment in recent years of students from middle-class families.

"They don't tend to come to (UC) Berkeley because there's a certain level where we can't give them good packages, because we're not a private school, so they go to our competition," she said. "But we also have a lot of students who come because they see (UC) Berkeley as a bargain."

For several public schools on the East Coast, such as the College of William and Mary, faster graduation rates cause an overall lower cost of attendance, even though financial aid award packages are very similar and UC Berkeley students earn slightly more on average upon graduation.

According to the Integrated Postsecondary Education Data System, a yearly study by the Department of Education, about 73 percent of UC Berkeley students graduate in four years, whereas 91 percent of students from William and Mary do the same. This overall slower graduation rate accounts for a $110,000 average net cost for UC Berkeley students, compared to the $81,680 net cost for William and Mary students.

"Graduation rates are a little bit better for William and Mary, so their cost will be lower," Bardaro said. "This causes their higher return on investments."


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