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Nathan Reyes lives with his family five minutes from Cal State Los Angeles, where he鈥檚 paying close to nothing to earn a bachelor鈥檚 degree that typically lands graduates a salary of $62,000 .

He鈥檚 one of hundreds of thousands of California low-income students who attend colleges that, , cost the equivalent of a few months of a typical salary that students earn within a few years of graduation. 

A  compares California鈥檚 colleges by analyzing how long it would take low- and moderate-income students to recoup the money they spent to earn a college credential. It shows that many community colleges, Cal States and University of California campuses 鈥� all public campuses 鈥� have better returns on investment than most nonprofit private colleges and for-profit institutions.

Reyes鈥� only expenses are car upkeep, gas, a few books and helping his family with some housing costs. The third-year student didn鈥檛 need to take out loans.

鈥淚 feel very lucky,鈥� Reyes, a communications major, said. 鈥淚n high school, I was always stressing about, 鈥極h, man, I鈥檓 gonna have a whole bunch of debt racked up after college.鈥� And now that I鈥檓 in my third year, I don鈥檛 have to worry about any of that.鈥�

Reyes, who鈥檚 20 years old, receives state grants to cover all his tuition and federal aid . He also works for  that pays students a stipend.

Report calculates time it takes to recoup cost of degree

The report was commissioned by College Futures Foundation, a nonprofit that promotes college completion. The report merges several concepts into one number: 

• The net price of a college degree after all financial aid is calculated 
• The typical earnings 10 years after a student first enrolls in a school 
• How much higher those wages are compared to what young adults earn with just a high school diploma. 

It defines low- and moderate-income households as those earning below $75,000 annually.

The data, all from the federal government, show that the time it takes to recoup the net costs of earning a degree at Cal State San Bernardino is less than three months. That鈥檚 because low-income students there incur about $5,000 in out-of-pocket expenses if they finish in four years. Within a few years they earn about $53,000 a year 鈥� double what young adults with only a high school diploma make.

At Cal State Los Angeles, the time to recoup the net costs of earning a bachelor鈥檚 is also less than three months of a typical post-college annual salary. 

鈥溾�嬧�婽his is really a first-of-its kind look,鈥� said the report鈥檚 author, Michael Itzkowitz, who headed the federal government鈥檚 first consumer tool for comparing college costs under the Obama administration. The approach is a mathematical way of demonstrating which colleges confer economic value to students beyond what a high school diploma would.

鈥淚 feel very lucky,鈥� Reyes, a communications major, said. 鈥淚n high school, I was always stressing about, 鈥極h, man, I鈥檓 gonna have a whole bunch of debt racked up after college鈥欌��

NATHAN REYES, UNDERGRADUATE STUDENT AT CAL STATE LA

A CalMatters analysis of Iztkowitz鈥檚 data found that the average time needed for a student to recoup their net costs is about two years at public institutions and a little over three years at nonprofit private colleges in California.

Some of those private campuses are as affordable as a Cal State, UC or community college after factoring in financial aid. Stanford University costs low-income students nothing. However, only 4% of students who apply are admitted, while all but three Cal States admit . Most undergraduates in California .

Pitzer, Pomona and the University of Southern California and several other highly selective nonprofit private colleges cost students less than a year鈥檚 worth of the typical salary they鈥檒l earn within a few years of completing their degree.

Return on investment varies by college

While some for-profit colleges have strong returns on investment, most do not. 

It takes nearly 13 years for students attending this  segment of higher education to recoup their costs, Itzkowitz鈥檚 calculations show. California鈥檚 Department of Justice has sued for-profit , accusing them of deceitful practices, and won large financial judgments and settlements.

And that doesn鈥檛 even account for the 22 for-profit institutions that show no return on investment, meaning students from those schools earned no more than what a young adult with just a high school diploma makes. In the report, 24 campuses in total, or 8% of all California colleges, showed no return on investment, including two small nonprofit private colleges. 

鈥淭here are for-profit institutions that can offer an affordable education and good employment outcomes and they鈥檙e recognized within the data,鈥� Itzkowitz said. 鈥淏ut what we also see is that there are a disproportionate amount that show more worrisome outcomes for students in comparison to other sectors.鈥�

Most California for-profit colleges, however, predominantly issue certificates, which are shorter-term credentials that don鈥檛 regularly lead to the.

At 79% of California institutions in the report, low and moderate-income students typically recoup their costs in five years or less. For nearly a third of campuses, it was less than a year.

For many students, the ultimate costs of a degree will be higher than the data published today. That鈥檚 because they need more than two years to earn an associate degree or beyond four years to earn a bachelor鈥檚, assuming they graduate at all. The longer they chase a degree, the less time they spend in the workforce earning the higher salaries that come with a college credential. Also, the federal net price data has limits: It only calculates what full-time freshmen pay. Students attending part time will experience different annual costs.

But the basic trend remains the same: State and federal financial aid at public campuses plus typical salaries that far exceed the wages for those with a high school diploma make college worth the investment.

Itzkowitz plans to produce a follow-up report that measures the return on investment by major. His organization, the HEA Group, produced an . Some majors lead to higher wages than others, which can skew school-wide results.

The data in today鈥檚 report show variation within public universities, too, even in the same city. UCLA鈥檚 net price-to-earnings ratio is about seven months and its students tend to earn more than those from Cal State LA after graduating. But the typical cost of a degree after four years for low-income students is roughly $31,000 鈥� far higher than the $5,500 at Cal State LA, which is 20 miles away. 

鈥淚 wanted to go to UCLA, but it was too expensive for me,鈥� Reyes said. 鈥淚 did get accepted.鈥�

Like he did at Cal State LA, he would have probably qualified for the Cal Grant, which waives tuition at public universities. But the distance from home would have forced him to either live in a UCLA dorm or commute about two hours daily between home and the crosstown campus. Housing, not tuition, is usually the largest expense for students at public universities. Borrowing money was out of the question for him. 

So was a long drive to UCLA. 鈥淚f I ended up missing a class or something, I鈥檇 beat myself up over it,鈥� he said. 

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