According to the Department of Labor, 68.1% of new high-school graduates were enrolled in a college or university in 2010. That breaks down to roughly 2.2 million new college students attending public and private institutions in 2010. This number likely doesn't include the number of students enrolled in an industry-run college which focuses on training students to be better, high-level employees of their current employer.

TUTORIAL: Student Loans

For a recent high-school graduate, choosing between educational institutions can be difficult. After all, which institution's educational approach and reputation creates enough post-graduation opportunities to completely justify the time, expense and debt incurred upon attending?

Exploring Corporate Classrooms
Many businesses, from the financial sector to the fast food industry, have set up corporate-run, unaccredited, proprietary universities to provide a post-secondary education focused solely on the needs and concerns of the sponsoring business and its industry. Perhaps the most well-known example of this is Hamburger University, the corporate program developed by fast food restaurant McDonald's, in 1961. It's estimated that this program graduates about 5,000 employees every year, allowing them to move forward into careers as managers and franchise owners.

These industry-run colleges have no tuition fees, because this is an investment in current employees that will help create the future of the company. However, their educational focus is so narrow that if the student decides to leave the company, he or she may find that his or her corporate college education has little or no value to another employer. For older students who feel committed to their employers and are looking for a free way to invest time in their careers and get a return, these classrooms could be the perfect solution. However, new, young employees without enough work experience to be certain about their commitment to their current employer, may want instead to put their time into a traditional college experience.

Public or Private?
The average annual cost for a four-year education at a public university during the 2007-2008 school year, was just under $20,000. The cost per year for a private, non-profit university during the same period was $35,000. That difference of $17,000 per year could equal a startling $68,000 in student loan debt by the time the student graduates. Some of the other differences between the two include:

  • Private universities often have smaller class sizes and more opportunities for one-on-one attention.
  • In addition to being less expensive, public universities may be easier to get into than a private institution.
  • Private schools may have a far-reaching reputation for having very well-educated students.

The Jobs
Generally, people assume that the cost of a college education, and the interest charged against student loan debt over the years, is worth the higher income you can earn as a college graduate. However, what is the average income that college graduates from public, private and corporate-run universities are receiving?

It's estimated that a McDonald's store manager makes about $27,000 per year. It's important to note that this is made without the burden of student loan payments. However, Hamburger U isn't the only corporate college out there, so while we can't give an accurate range across multiple industries, it's a valid option to consider. Hamburger U graduates who go on to become franchise owners, face a big commitment in terms of licensing and franchise purchases, but stand to make a few hundred thousand per year.

Across the board, 2011 college graduates have seen an average salary of $50,034 upon graduation. While Pay lists the average salary offered to graduates of both private and public universities, there seems to be no data giving an average for these groups, exclusive of each other. Instead, it looks as though the field the graduate went into after graduation, was of a bigger influence on pay than the school they attended.

It's important to note that this information leaves out many other options available to would-be students, such as technical schools, trade schools, career programs, such as nursing, and two-year education options.

The Bottom Line
There are both tangible and intangible benefits to attending one college over another, but when considering the economics of your education, it may be more important to look at the field you want to enter, its average pay and your likelihood of getting a job after graduation. Once you do that, you will have a better handle on whether or not the amount of student loan debt you need to attend a certain school is worth it. (For more on post-secondary, read Investing In Your Child's Education, Invest In Yourself With A College Education, and 5 Ways To Fund A College Education.)

Related Articles
  1. Personal Finance

    Insider's Guide To The Top U.S. Business Schools

    The best business school for you depends on your skills, career goals and interests. We help future MBA's make a more informed choice.
  2. Professionals

    Who Needs to Take the Series 65?

    Most states require individuals to pass the Series 65 exam in order to act as investment advisors.
  3. Professionals

    Career Advice: Accounting Vs. Law

    Identify the key differences between working in accounting and working in law. Understand which specific skills make you better-suited for each career.
  4. Professionals

    Want to Be High-Earner? Avoid these College Majors

    Why these college majors might offer a poor chance of paying off those student loans sooner rather than later.
  5. Budgeting

    Off-Campus vs Campus Housing, Which One To Choose

    With U.S. college tuition ranging from free to over $30,000 a year, there are a lot of decisions to make in the months leading up to September. One of the decisions that falls by the wayside ...
  6. Personal Finance

    Does It Make Sense to Go to College in Europe?

    If you're deciding whether to get a degree abroad, first do your research and talk to alumni who have completed the same program.
  7. Credit & Loans

    Four Ways to Improve Education In America

    U.S. students place 27th in math and 20th in science out of 34 countries. The United States must reform its education system or harm future economic productivity and global trade competitiveness.
  8. Personal Finance

    8 Profitable Majors For The College-Bound In 2015

    Choose your college major wisely to justify the rising cost of higher education. Here are 8 majors that lead to good jobs and high salaries.
  9. Personal Finance

    8 Reasons Why Valued Employees Quit

    Salaries are important, but retaining top employees requires more than just providing competitive pay.
  10. Professionals

    How Advisors Can Minimize Their Own Risks

    Risk management is important in any enterprise. But when it comes to the financial advisory business, the stakes are higher.
  1. Student loans, federal and private: what's the difference?

    The cost of a college education now rivals many home prices, making student loans a huge debt that many young people face ... Read Full Answer >>
  2. Can I use my IRA to pay for my college loans?

    If you are older than 59.5 and have been contributing to your IRA for more than five years, you may withdraw funds to pay ... Read Full Answer >>
  3. Can I use my 401(k) to pay for my college loans?

    If you are over 59.5, or separate from your plan-sponsoring employer after age 55, you are free to use your 401(k) to pay ... Read Full Answer >>
  4. What are the best MBA programs for corporate finance?

    Opinions vary based on which publications you consult, but the best MBA programs for a career in corporate finance are at ... Read Full Answer >>
  5. For which kind of jobs is having Magnum Cum Laude most important?

    Having a magna cum laude degree is most important for jobs in the fields of finance, management consulting and engineering. ... Read Full Answer >>
  6. What does passing the Series 6 enable me to do?

    The Series 6, or the Investment Company Products/Variable Contracts Limited Representative, exam is administered by the Financial ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  2. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  3. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  4. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  5. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!