Collegiate Return on Investment
Salary.com has the scoop. There aren’t any surprises, for those who pay attention to such things. It’s worth noting that the difference here actually has less to do with ROI and more to do with whether you attended public school or private. The “worst” degree, which is communications, still pays for itself 58% of the time for public schools. But less than 1-in-5 does private school do the same. Granted, private school degrees in certain tech fields probably beat that, but outside of a select few majors and a limited number of schools, I’d be willing to bet you fall below 58% relatively quickly.
Which is not to say that public schools are always a good investment. Forbes has a list of schools that arguably aren’t. A fair number of them are public schools. A fair percentage of that, of course, is attributable to student inputs rather than outputs.
Meanwhile, the return-on-investment for private school may not be as bad as previously thought:
“We find no statistically significant differential return to certificates or associates degrees between for-profits and not-for-profits,” they wrote in the paper, which was released last month.
Certificate holders from for-profits tended to fare slightly worse in the job market, according to the study, while associate degrees from for-profits were worth slightly more than those from nonprofit institutions. Hence no clear winner emerged.The revised paper still included some worrisome findings about for-profits. Those colleges are typically more expensive than their nonprofit counterparts, particularly community colleges. For-profits charged an average of $6,300 more in annual tuition for certificate programs, according to the study’s sample, and $6,900 more per year for associate degrees.
“The return on investment is undoubtedly lower at for-profits,” the paper said.However, the study’s most significant finding, its authors wrote, was the large variation in wages and labor market returns across majors and academic disciplines. Those program-specific comparisons are probably more valuable than comparing wage data at an institutionwide level.
That last part, of course, undermines the point that I just made. Or maybe it’s referring to outputs (wages) moreso than inputs, which vary an order of magnitude from one institution to another. On the other hand, wages are for life and college costs are fixed. So I’m not sure. I’d also like to know is that for-profits have higher aggregate costs than non-profits, but how does that work if you delineate between public non-profit and private non-profit. Of course community colleges are going to be cheap. But how does the University of Phoenix compare to the University of Tampa (a private institution)?
There’s something noteworthy about both of these articles, though. We hear a lot about how college tuitions are rising because state support is slipping*. Yet, despite all that, public schools still offer huge discounts over private schools. Even out-of-state tuition at public schools tends to beat the privates. The former suggests that there is more at work with escalating costs than falling state aid (and that, before we even talk about increasing state aid, we need to establish that it won’t be used to enable unnecessary spending elsewhere). On the other hand, the latter statistic suggests that state universities are still doing a decent job curbing costs because out-of-state tuition is at least theoretically non-subsidized. Or maybe not, since it’s commonly stated that advertised tuition rates are not usually paid.
Anyhow, when we talk about ROI, we should not just look at the cost to the student costs, but total cost. One of my complaints about the “make college affordable” debate is how focused it is on making it affordable to the student, rather than keeping total costs in check. It’s one of the reasons I am excited about the potential for genuinely low-cost college options. Which our current system provides so little incentive for.
* – Note, I cannot find good statistics on this, though. The oft-cited statistic, which is the percentage of cost covered by the state, is not particularly helpful. The per-student dollar amount is what I want. The reason being that colleges that jack up tuitions to build a new rec center end up costing the student more and lowering the percentage of cost supplied by the state, while a more financially prudent university looks like it’s being more generously supported by the state when it isn’t.
I find a lot of these Return on Investment stories to be really wrong-headed because they make a lot of assumptions. The majors here are: Sociology, Fine Arts, Education, Religious Studies/Theology, Hospitality/Tourism, Nutrition, Psychology, and Communications.
Many of these majors are not ones that people pick because they are dithering. I would argue that many to most people who go major in Fine Arts, Education, Religious Studies/Theology, and possibly Psychology are not doing it for riches. They know these majors do not lead to brilliant financial success usually.
We need rabbis, priests, and ministers (unless you are Richard Dawkins and company). We need teachers. We need artists (unless you want the world to be very boring), we need social workers and substance abuse counselors and other people to work with those in trouble or on the margins of society. Talking about a ROI completely misses the point!!! These kind of articles assumes that everyone goes to college/university to find a good paying job and not to study something that interests them or to find a way to save the world. The anti-Intellectualism in these articles is astonishing!!!!!
I would also say that talking about private v. public is very hard because there is a wide variety of difference in of those.
You have the so-called Public Ivies like Berkeley and Michigan. These are very different from San Francisco State which has suffered in recent years. There have been a lot of stories about people not being able to enroll in required classes at SFSU because there were not enough sections offered and too many students. These put a lot of people in limbo. They were not graduating in four years because of class shortages, not their own fault.
When it comes to privates you have a number of schools that can be considered very to highly selective in admissions like the Ivies, Stanford, MIT, Brandeis, The University of Chicago, University of Rotchester, Cal-Tech, BYU, Notre Dame, Duke, Georgetown, and the various small-liberal arts colleges (Amherst, Oberlin, Vassar, Williams, Reed, Kenyon, the Seven Sisters, Swathmore, Haverford, Colby, etc.) And then you have private schools that have much lower admissions requirements like the Franklin and Marshall or Bard as a small example.
What would be interesting is comparing job opportunities and salaries of MIT and Cal-Tech engineers as compared to engineers from Cal or Purdue.
Or job offers and salaries for people from Cal and Michigan as compared to NYU, Boston University, and George Washington.
You can also compare job offers and salaries of UC grads to State grads in California. In the original master plan, UC campuses were supposed to be for A students, State campuses (like SFSU) were for B-students. This is a rough description of the Master Plan. You can also do this for other Flagship public universities and the less selective variants in each state.Report
If one doesn’t view college as an investment, it is certainly true that these numbers won’t be particularly helpful. I don’t think it’s anti-intellectual to view college in strictly financial terms. We’re talking about something that costs, at minimum, for most people, tens of thousands of dollars to get through.
I think more indicative would be comparing midrange schools public and private. Southwestern vs Southwest Texas State. Schools like MIT or Cal are too unusual to be indicative of much. Also, engineers wouldn’t necessarily be the best place to look because their pay doesn’t differ dramatically.
But I generally agree that with “public” and “private” we are covering a lot of ground. The only constant, though, is that the former tend to be cheaper. And I would expect, at least at the middle towards the bottom, public school is going to be more favorable. Probably, the higher up you get, the more advantageous private school is.Report
“If one doesn’t view college as an investment, it is certainly true that these numbers won’t be particularly helpful. I don’t think it’s anti-intellectual to view college in strictly financial terms. We’re talking about something that costs, at minimum, for most people, tens of thousands of dollars to get through.”
This is true but I often find that “getting an education” and learning about the world in a well-rounded and curious way are often absent from our educational talks and policy discussions on a K-12 level. School reform is all about this horrible mandatory testing that seems designed to create worker bees. College policy talk is all about STEM and jobs that provide decent salary. There is nothing wrong to this but it is not the only thing. I strongly dislike that a well-rounded liberal-arts education seems to be only an option for the upper-middle class and above who can send their kids to private school or afford to live in better public school districts.
I might be rather quaint and old-fashioned about this. Perhaps most people do go to college to get a decent job and this is where the survey is useful. Perhaps subjects like hospitality and nutrition are best taught as apprenticeships.Report
Well, as a matter of public policy, economic utility should, in my view, carry disproportionate weight. That’s where the state’s interest in education (be it K-12, or after) ultimately lies. Which isn’t to say that they should all just be vocational academies (even if we do need more of those, for some students), but I think the focus on STEM would be good, if I thought that it would improve the economy to the extent that its boosters do (which I don’t, though it certainly has an important place in things).Report
Will,
I do not disagree that we need STEM but I am doubtful that it would be a cure-all for the American economy especially if most STEM just ends up going into social media companies like Twitter and Instagram.
The entertainment industry (TV, Books, Movies, Music, Video Games, Comic Books, Fashion, and lots of other stuff) are a huge part of the American economy. Many people in these industries studied art at college/university. But their training and education is not recognized and that bothers me greatly. There seems to be a boorish tendency in America that thinks art is an innate talent and cannot be taught or cultivated. Parts of artistic talent are innate but Meryl Streep would not be Meryl Street without her undergrad and graduate degrees in theatre.
Not to mention that I think people would find things very boring and unpleasant without aesthetics and design.Report
We aren’t really in disagreement about the potential of the aggressing STEMing of education, even if we don’t entirely agree on why it is limited.
I don’t know that Hollywood as as big a claim on our economy as STEM. Nor that the formal education (and government bankrolling of it) is as required for it.Report
Will, I’d disagree that a formal education isn’t needed for a career in the arts and entertainment. A formal education can’t impart creativity on a person not inclined towards it. However, if you have a person inclined towards using their imagination than a formal education could give them the tools they need by teaching them how to write grammatical, paint, sculpt, or do a bunch of other things.Report
Lee, I don’t mean to suggest that a formal education in such things is without value. I would argue, though, that it’s not as universally critical as it is for engineering. There are degrees of importance. I’d argue that coding is in between those two, and IT has historically been in between coding and arts.Report
If we’re just looking at the Educational Experience as a howitzer to propel people downrange into the heart of the cubicle farm, no college could compete with an apprenticeship / mentoring program in terms of Bang for the Buck.
Of course, apprentices wouldn’t learn anything more than what they were taught in that apprenticeship. Life’s more than a job. I can’t speak to other professions but in my own, if you scratch a good programmer, you’ll find either a good musician or an artist of some sort underneath. Something about patterns, don’t know exactly what it is. This much I do know, the best coders I know generally conform to this rule. They seem to find some satisfaction in a well-written piece of code but their jobs don’t define their lives.
Perhaps the problem resolves to the absurd promises made by these institutions. Maybe it’s even subtler than that — it’s a perverse interpretation of the assertion that Going to College translates into a better job. Going to college translates into a better, more informed person, which usually translates into a better job. An employer looking at someone fresh out of college sees someone who actually committed to finishing a program — and did. The rest is sorta immaterial. They’ll have to be trained to do their job anyway — every firm has a different methodology.
And that’s where colleges and universities could do a far better job. Look at the good universities. Somewhere, just down the street, is an incubator where new firms are starting up all the time. Research Triangle in Raleigh/Durham was set up to harness recently graduated talent — and some that hasn’t even graduated yet.Report
When hiring people, or when teaching them, or when training them, I struggle with how to induce these people to think on their feet, to look out into the landscape of the decisions they have to make and the actions they have to take, and to identify relevant facts and conditions. I struggle with how to teach them to be aware, and to actually think. Most people seem to want to memorize and repeat.
College, it is to be hoped, serves as an indicator that one has learned how to think. This is not always true, of course, and it is sadly the case that many colleges do not convey these skills particularly well. Worse yet, employers do not seem to either be able to identify people possessed of this skill or seem to be unable to exploit it when it is found — at least in recruitment and in entry-level positions.
Nevertheless, this is what we should really be looking for in college — not just the imparting of a particular body of knowledge and skills, but development of the ability to think.Report
I agree with you in the abstract. If I were designing higher education, it would be towards broader undergraduate degrees: Physics instead of mechanical engineering. Sociology, psychology, or economics instead of business. And so on. The skills and knowledge for particular career paths would be gained in vocational degrees, minors, and post-graduate education. There is value in broader education instead of being all eagle-eye on vo-tech.
However, so much would have to change between here and there that I seldom talk about it. It would require employers to re-evaluate how they approach hiring. It would require a mindset change by the public. Most importantly, it would require failing students and instead of looking at those schools that do so as though they are failing, looking at them instead like they are institutions that will not let students pass through unless demands are met.Report
College, it is to be hoped, serves as an indicator that one has learned how to think.
Not in 2013, it isn’t. I would only assume that it is an indicator of knowing how to jump through four years of hoops.Report
It looks like the Forbes article was based solely on the Payscale site’s numbers. I checked them out and they’ve got a very small sample size, especially for smaller schools.Report