40-yr NPV · trade school comparison · loan cost · break-even · client-side

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//// Education · Financial Decision

Is College Worth It? ROI Calculator

See the 40-year NPV of a college degree vs trade school vs no degree — with your actual numbers. Break-even, lifetime earnings premium, and loan cost all shown.

GPA Scale4.0(standard US)

Avg Student Debt$37,700(Class of 2023)

Compound FrequencyMonthly(most savings accts)

Trade School Wins

The trade school path shows a higher NPV than the college path at these numbers. Trade programs often have a faster break-even and lower debt exposure.

College Costs

Total College CostTuition + room & board, all years

Student Loan AmountTotal amount borrowed

Loan Interest Rate

Repayment Period

yrs

Years to Graduate

Career Projections

Expected Salary With DegreeStarting salary post-graduation

Salary Without DegreeWhat you could earn now without college

Trade School Comparison

Trade School Cost

Trade Career SalaryStarting salary in the trade

Years to Complete

yrs

Annual Premium

$22,000

degree vs no degree

Break-Even

Yr 16

years until ROI-positive

40-yr Lifetime Premium

$1.1M

vs no-degree path

Net Lifetime Gain

$857K

after all costs

40-Year NPV Comparison (5% Discount Rate)

College Degree

$963K

ROI: 299%

Break-even: Yr 16

No Degree

$913K

Baseline comparison

Trade School ★

$1.2M

ROI: 6260%

Break-even: Yr 3

True Total Cost of College

Tuition + room & board$120,000

Loan interest paid+ $14,503

Foregone income (4 yrs)+ $152,000

True total cost$286,503

Monthly loan payment$454/mo × 10 yrs

The math is one input. Career path, job satisfaction, earning ceiling, and network effects are real — they just resist clean formulas.

Monthly loan payment (standard amortization)

P × (r × (1+r)^n) / ((1+r)^n − 1)

$40,000 at 6.5% over 10 yrs

= $454/mo

Total repayment: $54,503 | Interest: $14,503

Foregone income during school

foregoneIncome = yearsToGraduate × salaryWithoutDegree

4 yrs × $38,000/yr

= $152,000

The opportunity cost of being in school instead of working

True total cost of college

totalCost = collegeCost + loanInterest + foregoneIncome

$120,000 + $14,503 + $152,000

= $286,503

Annual salary premium

annualPremium = salaryWithDegree − salaryWithoutDegree

$60,000 − $38,000

= $22,000

40-year lifetime earnings premium (2% annual growth)

lifetimePremium = Σ(annualPremium × 1.02^y) for y = 0 to careerYears

$22,000/yr × growth factor over 36 career years

= $1.1M

Break-even year

year when cumulative premium ≥ totalCostWithForegone

cumulative premium hits $286,503 at year 16

= Year 16

Net lifetime ROI

ROI = (lifetimePremium − totalCost) / totalCost × 100

($1.1M − $286,503) / $286,503 × 100

= 299.3%

NPV comparison (5% discount rate, 40-yr horizon)

NPV = Σ(cashFlow_t / (1.05)^t)

College: $963K | Trade: $1.2M | No Degree: $913K

= College < Trade by $188K

NPV accounts for time value of money at 5% discount rate over 40 years

Key insight

The true cost of a 4-year degree is $286,503 when you include $14,503 in loan interest and $152,000 in foregone income. Against a $22,000/yr salary premium growing at 2%, you break even at year 16 and earn $1.1M in lifetime premium — an NPV of $963K vs $1.2M for trade school.

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