Education ROI Calculator Formula
Understand the math behind the education roi calculator. Each variable explained with a worked example.
Formulas Used
Lifetime Earnings Gain
lifetime_gain = annual_gain * career_years - education_costLifetime ROI (%)
roi_pct = ((annual_gain * career_years - education_cost) / education_cost) * 100Breakeven Years
breakeven = education_cost / annual_gainVariables
| Variable | Description | Default |
|---|---|---|
education_cost | Total Education Cost ($) | 100000 |
earnings_without | Annual Earnings Without Degree ($) | 35000 |
earnings_with | Annual Earnings With Degree ($) | 55000 |
career_years | Career Years Remaining | 30 |
annual_gain | Derived value= earnings_with - earnings_without | calculated |
How It Works
How to Calculate Education ROI
Education ROI compares the cost of education to the lifetime earnings premium it provides.
Formula
Lifetime Gain = (Earnings Increase x Career Years) - Education Cost
ROI = (Lifetime Gain / Education Cost) x 100
On average, a bachelor's degree holder earns $1.2 million more over a lifetime compared to a high school diploma holder.
Worked Example
A $100,000 education increases earnings from $35,000 to $55,000 over 30 career years.
education_cost = 100000earnings_without = 35000earnings_with = 55000career_years = 30
- 01Annual earnings gain = $55,000 - $35,000 = $20,000
- 02Lifetime gain = $20,000 x 30 - $100,000 = $500,000
- 03ROI = ($500,000 / $100,000) x 100 = 500%
- 04Breakeven = $100,000 / $20,000 = 5 years
Ready to run the numbers?
Open Education ROI Calculator