Climb Credit's Return on Investment (ROI) Calculation: What It Does and How It Works
By Rachel Seitz
If you’ve spent any time scrolling through Climb Credit's website, you might be familiar with our mission: increasing access to quality education. Measuring and tracking educational quality is an exciting and constantly-evolving subject. But how are we even able to track something as ambiguous as the quality of an education? We work closely with all of our school partners to measure how much return each student is expected to get on their specific educational investment. We’ve established a Return on Investment (ROI) calculation to consider the cost of leaving your current job, taking time off and paying for an education, and the eventual payoff of starting a new career. Before funding any program, we run our calculation to ensure that, by our metrics, the school is ROI-positive — i.e., a quality program.
How do we do this
We use this ROI calculation to measure individual programs, assessing the cost and benefits of a particular education. First, we look at all the information schools provide — tuition cost, graduation rates, placement rates, average starting salary of graduates, etc. And rather than simply taking their word for it, we also do our own research to back up the claims made by the school to the best of our ability.
We’ll work closely with the school to see if we can get comfortable with their data. We’ll reach out to former graduates to inquire about their experience; contact large school employers, getting their perspective on graduate preparedness in the workforce; talk to field specialists; and review industry data from trustworthy sources, such as the U.S. Bureau of Labor Statistics, to get a better sense of the job market landscape that students are entering. By taking our time to really understand what is being represented in a school’s graduation, placement, and (if available) salary numbers, Climb strives to ensure that the key inputs in our ROI model are trustworthy — because all models are only as good as the assumptions underlying them!
After verifying our inputs, we combine the net cost/benefit of a program with other standard financial criteria, such as expected salary growth, to see if an educational program is a good investment for most of its students. For us, that means the school has an expected ROI of at least 7.5%.
What this means for you
Measuring these data points and tracking programs’ net benefits helps us ensure that the programs we work with allow students to reach their career and financial goals. And we don’t stop evaluating once we’ve reached a partnership; instead, we conduct ongoing reviews to ensure that quality is maintained. Simply put, we make an effort to work with programs that have a proven track record of student success. We believe deeply that when more people have access to a good education, be it in the field of programming, healthcare, or any other sector, everyone benefits.
*Climb’s ROI calculation is performed on a best-efforts basis, based on the information available to Climb, and is not a guarantee of any individual school’s ability to benefit any individual person. Climb makes no representation, warranty or guarantees of any kind, express, implied, or statutory regarding its ROI calculation or what the ROI calculation implies about i) any particular school; or ii) any person’s decision to attend a school. Students should not rely on Climb’s ROI calculation in determining whether to attend a school and should make such a decision after performing their own analysis of whether a school is right for them. Climb will not necessarily update this post to reflect changes in the ROI calculation or any school’s changing ROI calculation over time.