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Our annual ranking of the 650 best undergraduate institutions focuses on the things that matter the most to students: quality of teaching, great career prospects, graduation rates and low levels of debt.

Unlike other lists of top colleges, we pointedly ignore ephemeral measures such as school reputation and ill-conceived metrics that reward wasteful spending. We try to evaluate the college purchase as a consumer would: Is it worth spending as much as a quarter of a million dollars for this degree?

The rankings are prepared exclusively for Forbes by the Center for College Affordability and Productivity, a Washington, D.C., think tank founded by Ohio University economist Richard Vedder.

For the second year in a row, Williams College, a small liberal-arts school in Massachusetts, has been named as the best undergraduate institution in America. With total annual costs adding up to nearly $55,000, a Williams education is certainly not cheap, but the 2,000 undergraduates there have among the highest four-year graduation rates in the country, win loads of prestigious national awards like Rhodes and Marshall scholarships, and are often rewarded with high-paying careers.

In second place? Princeton University, which boasts nearly nonexistent student debt rates due to one of the most generous financial-aid programs in the nation. Outside of Princeton and Harvard (No. 6), Ivy League schools fare relatively poorly, suggesting that their reputations might be a bit overblown. Yale (No. 14), Brown (No. 21) and Dartmouth (No. 30) crack the top 5%, but the other Ivies -- Columbia (No. 42), Cornell (No. 51) and the University of Pennsylvania (No. 52) -- do not.

Because of our emphasis on financial prudence, the zero-cost military service academies rank highly. The U.S. Military Academy at West Point, which topped the list two years ago, ranks third this time, thanks to outstanding teaching and high alumni salaries, while the Air Force Academy (No. 10) and the Naval Academy (No. 17) glide easily into the top 20. Even the less-prestigious academies -- the Coast Guard (No. 97) and the Merchant Marine (No. 158) -- score well.

Aside from the academies, the highest-ranked public school is the University of Virginia (No. 46), followed closely by the College of William and Mary (No. 49) and UCLA (No. 55).

The rankings are based on five general categories: postgraduate success (30%), which evaluates alumni pay and prominence; student satisfaction (27.5%), which includes professor evaluations and freshman-to-sophomore retention rates; debt (17.5%), which penalizes schools for high student debt loads and default rates; four-year graduation rates (17.5%); and competitive awards (7.5%), which rewards schools whose students win prestigious scholarships and fellowships like the Rhodes, the Marshall and the Fulbright.

In addition to the overall rankings, the Center for College Affordability and Productivity also prepares a "value" ranking that takes into account the overall cost of each school as relative to the quality of the education provided. Predictably, the service academies also dominate this "best buy" list, nabbing the top three spots: West Point, the Air Force Academy and the Naval Academy, in that order.

New York City's Cooper Union, which grants full scholarships to every student, snags the No. 4 value slot (overall ranking: No. 154), with the College of the Ozarks (No. 6 in value, No. 191 overall) and the University of Wyoming (No. 10 in value, No. 361 overall) also giving students amazing value for their educational buck.

Best colleges for the money: The top 10
RankSchoolTotal annual costStudent populationSAT rangeApplicants admitted
1U.S. Military AcademyFree4,6211140-135014%
2U.S. Air Force AcademyFree4,6201230-138017%
3U.S. Naval AcademyFree4,5521140-136010%
4Cooper Union (N.Y.)Free9951220-15107%
5U.S. Merchant Marine Academy$7,281982N/A38%
6College of the Ozarks (Mo.)$8,7761,347N/A9%
7Berea College$8,9861,5481020-127019%
8U.S. Coast Guard Academy$4,6009731150-136025%
9Brigham Young University, Idaho$12,92014,944990-123097%
10University of Wyoming$24,886*12,427970-122097%
*Out-of-state tuition; in-state students pay $16,576
See the full list of "best buy" colleges
Forbes' best colleges: The top 10
RankSchoolTotal annual costStudent populationSAT rangeApplicants admitted
3U.S. Military AcademyFree4,6211140-135014%
4Amherst College$54,3221,7441340-154016%
5Stanford University$55,91818,4981360-15508%
6Harvard University$53,95027,6511390-15907%
7Haverford College$55,6321,1901300-149025%
8University of Chicago$57,59015,0941400-156027%
10U.S. Air Force AcademyFree4,6201230-138017%
See the full list of America's best colleges