Scholarships can dramatically reduce the net cost of attending college or graduate school. By lowering or eliminating tuition, they free up funds that might otherwise go toward student loans. But beyond the immediate relief, it’s useful to evaluate a scholarship in terms of its long-term return on investment. This calculator considers both the money you save upfront and the salary you expect to earn after completing your program. The result shows how quickly you might recoup any remaining costs.
The return on investment for a degree with scholarship aid is calculated as:
Where is the expected first-year salary, represents the total tuition and fees, and is the scholarship amount. In essence, the formula compares the extra earning power to the net cost of the program.
| Tuition | Scholarship | Salary | ROI |
|---|---|---|---|
| $40,000 | $20,000 | $50,000 | 150% |
In this example, net tuition is $20,000. With a $50,000 starting salary, the first year’s income exceeds the cost by 150%. Of course, your personal ROI depends on job prospects in your field and whether the scholarship is renewable for multiple years.
While ROI is a helpful metric, education offers value beyond dollars and cents. Scholarships can allow you to attend a higher-ranked school or explore subjects you’re passionate about. Consider internships, networking, and long-term earning potential in your calculations. Some scholarships also come with mentorship opportunities that may open career doors later on.
Another approach is to see how long it takes to recoup your net tuition costs once you start earning. Divide net tuition by monthly take-home pay to estimate the number of months until you’ve effectively “paid back” your investment. This simple method can help you budget for student loan payments if you borrowed any remaining amount.
This calculator doesn’t factor in living expenses, inflation, or raises over time. Actual ROI may vary depending on job market conditions, additional scholarships, or part-time work during school. Use the results as a planning guide, and adjust assumptions as you gather more information about your desired program and career path.
Calculate your investment growth with our Compound Interest Calculator. See how your money can grow over time with compound interest.
Easily calculate your ideal hourly freelance rate based on monthly expenses, desired profit, billable hours, and weeks worked per year. Optimize your freelance pricing strategy today!
Compare the total expenses of attending an event virtually versus traveling to the conference venue. Input travel, lodging, and registration costs to see which option fits your budget.