What is Pot score and how is it useful?

The "Pot score," which stands for "Pay Over Tuition," is an equation devised to evaluate the return on investment (ROI) of different degrees based on the potential earnings relative to the cost of obtaining the degree. In essence, it helps to determine which degrees offer the best financial outcome.

Calculation

The Pot score is calculated by dividing the expected pay (above minimum wage) by the tuition cost required to earn the degree. For instance:

1. Expected Pay: The potential salary you could earn above a minimum-wage job.
2. Tuition Cost: The total cost of obtaining the degree.

Example

For a degree in computer engineering, you might expect to earn around $70,000 above minimum wage. If the tuition cost is $50,000, the Pot score would be calculated as: [ \text{Pot Score} = \frac{70,000}{50,000} = 1.4 ]

Importance

• Career Decision: It helps in choosing a degree with the best financial payoff. The higher the Pot score, the better the ROI.
• Financial Planning: Allows prospective students to compare different career paths based on their financial viability, taking into account both starting salaries and the cost of education.
• Real-life Application: Kristy Shen, a guest on the ChooseFI, found that degrees like computer engineering had a high Pot score (e.g., 2.16), indicating good financial returns, while others like writing had negative scores, reflecting poor financial outcomes 1 2.

Using this method, Shen discovered that some professions traditionally considered prestigious, like being a doctor or lawyer, didn't fare well on the Pot score due to high tuition costs and extended years of study required 2. This tool provides a way to make informed decisions that balance passion and practicality in career planning.