By Patricia Reaney

NEW YORK (Reuters) - Princeton scores top marks and edged past Williams College in Massachusetts and California's Stanford University in a new ranking of the top colleges in the United States released on Wednesday.

The New Jersey university topped the Forbes list, which assessed U.S. colleges based on their graduation rates, student outcomes and satisfaction, low levels of debt and post-graduate success.

"Princeton does well across the board," said Michael Noer, Forbes executive editor.

With about 5,200 undergraduates and an annual total cost of $53,934, Princeton had the highest freshman to sophomore retention rates, and Noer said the school also did well in the prominence of their alumni.

"Despite being a pretty expensive place, they have the seventh-lowest debt rate on the list and the fifth-highest graduation rate," Noer added in an interview. "They just kicked it across the board."

The University of Chicago and Yale University rounded out the top five colleges in the list featured in the latest issue of Forbes magazine and online at www.forbes.com/colleges

Four Ivy League universities scored high enough marks to be included among the 10 best in the country. Harvard captured the No. 6 spot and New York's Columbia University placed 8th.

All of the top five colleges have less than 7,000 undergraduates and total annual costs ranging from $53,934 for Princeton to just under $60,000 for the University of Chicago.

The escalating costs of college in the United States, where Noer said obtaining a four-year degree costs about $100,000 for fees, books and tuition, is a major topic of discussion.

"We are looking at a crisis in higher education, in terms of cost," said Noer, adding that it is easy to spend a quarter of a million dollars for an undergraduate degree.

"I think the most important thing a school should do is provide value for its customers, which are its students."

The ranking was prepared for Forbes by the Center for College Affordability & Productivity, a Washington, D.C. not-for-profit research group.

"The question is, 'Is it really worth it?'" said Noer. "That is the question we are trying to answer with this ranking. These schools, based on the data, seem to be worth it."

Forbes ranked over 650 schools to compile the list.

(Reporting by Patricia Reaney; Editing by Kenneth Barry)