Risk or Reward

CHAPTER 7, LESSON 6

NAME DATE
Michael Rivera-Matos 3/20/24

DIRECTIONS
Read the scenario below on calculating an education option’s return on investment.

Tommy’s Education Options

One of the most important factors to consider when preparing for your education journey
after high school is your education’s return on investment (ROI). You want to be sure that
the time and money you spend on your education will pay off once you graduate and settle
into a career. To figure out an estimated ROI, you need to uncover both the potential cost for
your education program and the average income for your planned career.

Tommy is getting ready to graduate high school and wants to become a web developer.
The first step he needs to take to determine his ROI is to find out about the education
requirements for his intended career as a web developer. (Remember, you can get started in
many careers with a certification or a license. You don’t always have to have a full degree.)

Tommy discovers that the education requirements for a career as a web developer are either
an associate/bachelor’s degree or a certification.

After doing some research, Tommy narrows his search to two options:
1. Utah Valley University: Bachelor’s Degree
2. CareerFoundry Online Program: Certification

Now that Tommy has a couple of options, he needs to estimate the net price for his education
at both places. If he uses a net price calculator, it will break down the cost into estimated
price points.

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 1 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

Most colleges’ websites have a net price calculator where students can enter academic,
demographic, and financial information to get an estimate of how much money they’ll need
to pay out of pocket as well as how much they’ll need to earn in financial aid. Net price
calculators typically ask for:
• Grade and current GPA • Parents’ annual income
• Age • Parents’ total assets (checking and
• Annual income savings accounts)

• Number of siblings • Parents’ retirement balance

• Parents’ marital status and state of • Parents’ current home value and
residence mortgage balance

Tommy notices that different net price calculators sometimes include different expenses.
Some calculators will include room and board, meal plans, supplies, etc., while others just
list the cost for the program. And some will only show the cost for one year or for the whole
program. Plus, Tommy sees that many calculators break down total cost (based on some
information he gave them) into what he would be expected to pay versus how much money
in financial aid he’ll need.

Now, this is an estimate. Just because the calculator gave Tommy a number for financial aid,
it doesn’t mean he can’t get more or less depending on what he has saved.

Tommy now has everything he needs to calculate the net price. He’s gathered all the information
from his two school options to compare the financial investment they would require.

EDUCATION OPTION 1: EDUCATION OPTION 2:

UTAH VALLEY UNIVERSITY CAREERFOUNDRY ONLINE PROGRAM

Bachelor’s degree, Certification, full-stack

Program Type Program Type
web design and web development
and Name and Name
development program

Program Length 4 Years Program Length 5–10 months

• $30,298 (per
Estimated Net academic year) Estimated Net
$7,900 (full program)
Price • $121,192 (full Price
four years)

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 2 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

EDUCATION OPTION 1: EDUCATION OPTION 2:

UTAH VALLEY UNIVERSITY CAREERFOUNDRY ONLINE PROGRAM
(CONTINUED) (CONTINUED)

• Project-based
• Tuition
curriculum
• Room
•P  rofessional portfolio
Estimate accommodations Estimate
•D  edicated mentor
Includes • Meals Includes
•C  areer support
• Books and supplies
• J ob guarantee or
• Personal expenses
money back

• $8,804 (minimum
Estimated suggested amount Estimated
Financial Aid per academic year) Financial Aid None
Need • $35,216 (full four- Need
year program)

• $21,494 (per
Estimated academic year) Estimated
$7,900 (full program)
Cost for You • $85,976 (full four- Cost for You
year program)

Tommy now has a clearer idea of the cost of both options. But he’s not quite ready to make a
decision yet. He knows that the cost of school needs to be compared to the expected salary
for his career. So he does some research on the average income for web developers and
how long web developers typically work before retirement.

The average annual salary for web development is $70,344.

The average retirement age for a web developer is 65 years old:

• 41 working years if the career is started by 24 years old
• 47 working years if the career is started by 18 years old

* It’s important to remember, retirement isn’t an age. It’s a financial number. Just because
many people retire at 65 doesn’t mean you can’t retire earlier or later than that. We’ll talk
more about planning for retirement later in the course.

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 3 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

Now, Tommy’s ready to take all of those numbers and figure out how many years it’ll take for
his income as a web developer to equal his education costs. (Remember, this is an estimate.
It’ll give him a good idea, but it’s not 100% accurate.)

RETURN ON INVESTMENT: RETURN ON INVESTMENT:

UTAH VALLEY UNIVERSITY CAREERFOUNDRY ONLINE PROGRAM

Annual Net Annual Net

$30,298 N/A
Cost Cost

Program Total Program Total

$121,192 $7,900
Net Cost Net Cost

Annual Career Annual Career

$70,344 $70,344
Income Income

Lifetime Career $2,884,104 Lifetime Career $2,884,104

Income (41 years) Income (41 years)

Return on Return on
Investment Investment
$121,192 $7,900
Percentage ÷ $2,884,104 Percentage
÷ $2,884,104
(Net Cost ÷ (Net Cost ÷
0.042 (4.2%) 0.003 (0.3%)
Lifetime Career Lifetime Career
Income) Income)

If Tommy decides to go to Utah Valley University for a degree in web development, the cost
would be about 4% of his lifetime income. He compares this to getting a certification from a
CareerFoundry online program, which would be 0.3% of his lifetime income.

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 4 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

DIRECTIONS
Answer the following questions using the information provided from Tommy’s story and additional research.

Pretty interesting outcome, right? But Tommy’s decision isn’t done yet. The financial ROI is
important, but he would also need to think about other elements he would personally find
valuable or not in an education.

Imagine you’re Tommy, and use his research as a guide to think through some advantages
or disadvantages for each option. Maybe attending school online versus going to a college
campus is more important. Maybe you want the school to help you find job opportunities
when you graduate. What are your must-haves and your deal-breakers? Look through the
websites of these two educational options, and keep an eye out for things that are pros or
cons for you.

EDUCATION OPTION 1: EDUCATION OPTION 2:

UTAH VALLEY UNIVERSITY CAREERFOUNDRY ONLINE PROGRAM

Advantages Advantages
Higher earnings Cost
Personal development Safe learning environment
Discover your interests Personalized education
Personal investment Learn at your own pace

Disadvantages Disadvantages
High cost. Cheating is garder to monitor
Years of student loan debt. Lack of skill development
Not necessary for some jobs. Time management
Health

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 5 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

All right, it’s decision-making time. Using Tommy’s information and school choices, take
some time to look through all the research above and choose the option that would give
you the best ROI possible. Explain your reasoning as clearly as you can.

1. Of the two education options you researched, which would you choose?
I would choose the univeristy of ketucky

2. What’s the financial return on investment for your school of choice?

If you make about $44,000 a year, it will take you 3.7 years following graduation to break even.

3. Explain your reasoning.

My reason is because

Tommy is now on his way to a good career, and now that you know the process, you can
follow these same steps to decide the right path to reach your own dream career. It might
take some research and dedication, but it’s totally worth it to have a clearer understanding
of the return on investment for your choices.

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 6 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

DIRECTIONS
Together with your parent(s) or guardian, walk through the process for your own education and career dreams.
Refer to Tommy’s process if you need help or directions.

Your Student Profile

Fill in your student profile, and keep it on hand for the rest of the activity.

* Note: This information is sensitive and personal. Be sure to keep it somewhere safe, and
don’t share it with anyone.

YOUR INFORMATION

Desired Career Grade Level Current GPA Age

Police officer 10th 3.6 GPA 15

Marital Status Siblings Total Annual Total Assets

Income (Checking and Savings Accounts)

married Two IDK IDK

YOUR PARENTS’ INFORMATION

Marital Status State of Legal Total Annual Total Assets

Residence Income (Checking and Savings Accounts)

Married

Retirement Current Mortgage Remaining

Balance Home Value Paid-Off Amount Mortgage Balance

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 7 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

Research Your Career

1. What kind of degree, certification, or license is needed for the career listed in your
student profile?
Law enforcment

2. Name two options that offer the required education.

univeristy of ky

3. What’s the average income for the career?

49,508 a year

4. How many years do people typically work in this career before they retire?*
27 years

* It’s important to remember, retirement isn’t an age. It’s a financial number. Just because
many people retire at 65 doesn’t mean you can’t retire earlier or later than that. We’ll talk
more about planning for retirement later in the course.

Calculate Net Price

Go to each school’s website, search for their net price calculator, and fill out both net price
calculators using your student profile. Some school options may not provide a calculator but
will provide the program’s cost. Record your findings in the chart on the next page.

Some calculators show you the cost for one year, while others estimate the whole program.
Note what the number represents and what the cost includes. Some calculators include
room and board, meal plans, supplies, etc., while others just list the cost for the program.

Plus, many calculators will break down the total cost into what you would be expected to
pay versus how much money in financial aid you will need.

Remember, this is an estimate. Just because the calculator gives you a number for financial
aid doesn’t mean you can’t get more or less depending on what you saved. Just don’t take
on debt to pay for college!

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 8 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

EDUCATION OPTION 1 EDUCATION OPTION 2

Program Type Program Type

and Name and Name

Program Length Program Length

Estimated Net Estimated Net

Price Price

Estimate Estimate
Includes Includes

Estimated Estimated
Financial Aid Financial Aid
Need Need

Estimated Cost Estimated Cost

for You for You

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 9 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

Calculate the Return on Investment

Research and complete the chart below to calculate the ROI for your school choices.

EDUCATION OPTION 1 EDUCATION OPTION 2

Annual Net Annual Net

Cost Cost

Program Total Program Total

Net Cost Net Cost

Annual Career Annual Career

Income Income

Lifetime Career Lifetime Career

Income Income

Return on Return on
Investment Investment
Percentage Percentage
(Net Cost ÷ (Net Cost ÷
Career Lifetime Career Lifetime
Income = ROI Income = ROI
Percentage) Percentage)

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 10 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

Considering Other Elements

The financial ROI is important, but we also need to factor in features you find valuable or not
valuable in an education. Maybe attending school online versus going to a college campus
is more important. Maybe you want the school to help you find job opportunities when
you graduate.

What are your must-haves and your deal-breakers? Look through the websites of your two
education options, and keep an eye out for things that are pros or cons for you.

EDUCATION OPTION 1 EDUCATION OPTION 2

Advantages Advantages

Disadvantages Disadvantages

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 11 O F 12

 Risk or Reward
CHAPTER 7, LESSON 6

Final Decision
Review all the information you found, make a school choice, and explain your reasons.

1. Of the two education options you researched, which would you choose?

2. What’s the financial return on investment for your school of choice?

3. Explain your reasoning.

Keep this information on hand as you begin to make plans, find scholarships and financing,
and prepare for your future.

FO U NDATI O N S I N PERSONAL FI NANCE PAGE 12 O F 12