Education ROI Estimator
Estimate your **degree ROI**, payback timeline, and debt-to-income ratio using starting salary, expected salary growth, and student debt details—with **tax-adjusted earnings** and **graduate school options**.
Step 1 – Education & Debt Inputs
Step 2 – Salary Expectations
Step 3 – Repayment Plan Settings
How It Works (Logic & Formulas)
This tool uses standard financial formulas to project your loan payoff. Here's a quick overview of the logic:
-
Net Salary Projection:
$$ \text{NetSalary}_n = S_0 \times (1+g)^n \times (1-t) $$Where $S_0$ = Starting gross salary, $g$ = Annual salary growth, $t$ = Effective tax rate.
-
Loan Amortization & Total Cost:
$$ \text{MonthlyPayment} = P \times \frac{r}{1 - (1+r)^{-N}} $$$P$ = Starting debt, $r$ = monthly APR, $N$ = total payments.
-
Debt-to-Income Ratio:
$$ \text{DTI} = \frac{\text{MonthlyPayment}}{S_0 / 12} \times 100\% $$ -
Net Present Value (NPV) of ROI:
$$ \text{NPV} = \sum_{n=1}^{N} \frac{\text{NetSalary}_n}{(1+d)^n} - (\text{Total Debt}) $$Where $d$ = discount rate (accounts for inflation).
FAQs
It estimates your net after-tax earnings over time by applying a conservative effective tax rate (default 22%), more accurately representing real take-home income and ROI value.
Adding graduate-level debt and tuition projections automatically decreases ROI and extends payback timeline—but often increases starting salary (e.g., +20–25% for master’s holders).
Most financial planners advise a payback within 10 years. This tool calculates where cumulative net earnings exceed total cost to show you the estimated "break-even" year.
Net Present Value discounts future cash flows to today's dollars—accounting for inflation and time value of money—giving a more realistic ROI measure.
Yes—inputs are fully customizable. Experiment with higher salary growth (e.g. 5%) or extra loan payments to see how they impact ROI and debt elimination time.
Latest data: Bachelor's degree holders in 2025 start around $68,392, while graduate degree holders earn ~20–25% more annually. 77% of bachelor’s degrees and 57% of master's have positive ROI. (Education Data Initiative, 2024; EPI studies)