Which colleges are the best deals? Or, at any rate, what colleges are good returns on the amount someone pays to attend them? According to PayScale, a site that gathers data on salaries, the top five schools using a measure of college cost relative to average earnings of graduates are MIT, Cal Tech, Harvard, Harvey Mudd College, and Dartmouth. Good to know.

Return on investment numbers are potentially a very interesting way to look at college decisions and college pricing. Some version of this sort of discussion currently fuels the debate about the potential gainful employment rule for for-profit colleges.

This whole rating system seems to be flawed, however, in that PayScale treats sticker price like actual price and uses a college’s official cost to perform the whole calculation. But that’s really a very big problem. The official cost that a college publishes is essentially a meaningless number since so many students, even from relatively high-income families, get tremendous discounts to induce them to go to individual colleges.

It’s not really appropriate to calculate a return on investment if most students and their families don’t actually make the financial investment they appear to based merely on a summary of tuition and fees.

This isn’t so much a problem for the Dartmouths and the Cal Techs of this list; the incomes of graduates are just very high no matter what the schools cost. The problem occurs here with the lower-rated schools. Franklin & Marshall, for instance, rates 154 on the list. This is because the school appears to be very expensive. This is misleading, however. Frankly, it doesn’t really matter if a school like Franklin & Marshall says its total cost works out to $46,025 a year if most students don’t pay anything like that amount. [Image via]

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer