The Debt-to-Earnings Reality Check: Which Colleges Leave Graduates Underwater?

How to use the College Scorecard’s debt and earnings data to separate colleges that pay off from those that don’t.

When families evaluate the cost of college, they tend to focus on the sticker price: tuition, room, board, fees. And when financial aid arrives, the conversation shifts to the out-of-pocket number—what we’ll actually write a check for. But there’s a third number that matters more than either of those, and almost nobody looks at it until it’s too late: the ratio of what a graduate owes to what they’ll actually earn.

The U.S. Department of Education’s College Scorecard provides exactly the data you need to calculate this. For over 1,600 four-year institutions, it reports both the median debt at graduation and the median earnings of graduates 10 years after they first enrolled. Divide one by the other and you get a debt-to-earnings ratio (DTE)—a single number that tells you, at a glance, whether a college’s graduates are comfortably ahead or dangerously underwater.

The national median DTE is 0.42—meaning that the typical graduate owes about 42 cents for every dollar they earn annually a decade after starting college. That’s manageable. But at six institutions, the ratio exceeds 1.0—graduates owe more in debt than they earn in an entire year. And 42 schools sit above 0.80, a zone where loan repayment, graduation rates, and post-college financial health all deteriorate dramatically.

Let’s look at what the data reveals.

The Landscape: 1,628 Colleges, Plotted

The most illuminating way to see this data is to plot every institution on two axes: what its graduates owe (horizontal) and what they earn (vertical). Schools in the upper-left corner are the dream scenario—low debt, high earnings. Schools in the lower-right are the cautionary tale—high debt, low earnings.

Several patterns jump out immediately. First, public institutions (blue) cluster in a relatively tight band—median debt around $21,000, median earnings around $54,500, yielding a typical DTE of about 0.38. Private nonprofits (orange) are more dispersed, with higher median debt ($25,000) but similar median earnings, pushing their typical DTE up to 0.44.

At the extremes, the contrast is stark. Berea College in Kentucky—which famously charges no tuition—posts the lowest DTE in the country at 0.08, with just $3,591 in median graduate debt. Princeton and Stanford follow close behind, combining generous financial aid with blockbuster earnings ($110K and $124K respectively) to achieve DTEs under 0.10.

At the other end, Martin University in Indianapolis posts a DTE of 1.86—its graduates carry $42,000 in median debt but earn just $22,544 a decade out. Five other institutions cross the 1.0 threshold, meaning their graduates’ entire annual salary wouldn’t cover their student loan balance.

The Cascade: What Happens as DTE Climbs

A high debt-to-earnings ratio isn’t just a number. It’s a predictor of a cascade of other bad outcomes. When we group all 1,628 institutions into DTE bands and look at what else happens to their students, the pattern is unmistakable.

At schools with a DTE below 0.25—the healthiest group—median earnings reach $78,466, the graduation rate is 82%, and nearly 80% of borrowers are successfully repaying their loans within three years. These are institutions where the investment clearly pays off.

At schools with a DTE above 0.80—the most distressed group—median earnings drop to $32,810, the graduation rate collapses to just 27%, and only 22% of borrowers are repaying on schedule. These institutions aren’t just expensive relative to earnings; they’re also failing to get students across the finish line, which makes the debt burden even harder to bear.

The takeaway is sobering: debt-to-earnings ratio isn’t just one metric among many. It’s a leading indicator of whether a college’s entire value proposition is working. When the ratio is healthy, everything else tends to be healthy too—completion, repayment, earnings. When it’s not, everything else breaks down.

The Far West (California, Oregon, Washington, Hawaii, and others) posts the lowest regional DTE at 0.33, driven by a combination of relatively moderate debt ($20,555) and strong earnings ($62,739). The Mid East and New England regions show median DTEs right around the national average, with higher debt offset by higher earnings.

The Southeast stands out as the highest-DTE region at 0.48. It’s not because debt is dramatically higher there ($23,885)—it’s because earnings lag significantly ($47,484). The 392 institutions in this region collectively illustrate a key principle: the DTE ratio is as much about the earnings side of the equation as the debt side. A school with moderate tuition but weak post-graduation earnings can be a worse deal than an expensive school with strong outcomes.

How to Use the Debt-to-Earnings Ratio in Your College Search

Calculate it yourself. Go to collegescorecard.ed.gov, look up any institution, and find the median debt and median earnings figures. Divide debt by earnings. A ratio under 0.40 is healthy. Between 0.40 and 0.60 is worth scrutinizing. Above 0.60 should raise serious questions—and above 0.80 is a red flag by almost any measure.

Compare apples to apples. If you’re choosing between a $30,000-per-year public university and a $55,000-per-year private college, don’t just compare sticker prices. Compare the DTE ratios. The more expensive school may actually produce a better ratio if its financial aid is generous and its graduates earn significantly more.

Factor in your specific major. Institution-wide DTE ratios are averages. If you’re planning to major in Engineering at a school with a middling overall DTE, your personal ratio will likely be much better than the school average. If you’re planning to major in a lower-earning field at a school with high debt, the ratio you personally experience could be much worse. The Scorecard provides field-of-study-level debt data that can help you refine the picture.

Don’t ignore the completion rate. A low DTE ratio means nothing if the school’s graduation rate is 30%. Students who take on debt but never finish their degree face the worst of both worlds—the loan burden without the earnings premium. The Scorecard’s DTE data is based on graduates, but the completion rate tells you how likely you are to actually become one.

Run the numbers before you commit. If a school’s median graduate carries $30,000 in debt and earns $40,000 ten years out (DTE of 0.75), that means a typical monthly loan payment of roughly $300–$350 on a take-home income of about $2,800. That’s 11–13% of take-home pay going to student loans alone—before rent, food, transportation, or savings. Families should do this math before signing the enrollment agreement, not after.

The Bottom Line

The debt-to-earnings ratio isn’t a perfect measure. It doesn’t account for family wealth, geographic cost of living, or the non-financial value of education. But it is the single best quick-read metric families have for evaluating whether a college’s financial proposition adds up.

The College Scorecard makes this data freely available for virtually every accredited institution in the country. Among the 1,628 four-year schools we analyzed, the range is enormous: from Berea College’s 0.08 to Martin University’s 1.86. That 23-to-1 spread means the difference between a degree that pays for itself many times over and one that leaves graduates struggling for a decade.

Know the number before you write the check.

Data source: U.S. Department of Education College Scorecard, released November 2025. Debt-to-earnings ratio calculated as median graduate debt divided by median earnings 10 years after entry. Analysis limited to four-year institutions with both debt and earnings data available. All figures are in nominal dollars.