Education Industry Reporter

Gauging the ROI of a College Degree

Posted in Department of Education, Higher Education News, Higher Education Policy, Law Schools, News from the Hill, Uncategorized

CONTRIBUTED BY
David P. Lewis

An article in The Wall Street Journal today (subscription required) reports that Senators Ron Wyden (D. Ore.) and Marco Rubio (R., Fla.) are expected to introduce legislation later this week that would require each state to make available information on the average salaries of college graduates who attended institutions in that state.  The information would be provided by institution and major, with the goal of enabling prospective students to “compare salaries by college and major to assess the best return on their investment.”

This is a welcome development that parallels the pressure on law schools for greater transparency regarding the employment outcomes of their students (as we have written about previously – see herehere, here, and here).  As the father of a child going through the college process now, I am very focused, among other things, on what graduates of particular programs in particular target schools do after they graduate, and can attest to the statement in the article that prospective students are “awash with information about costs” but have almost no way “to tell what graduates at specific schools earn – or how many found jobs in their chosen field.”  While the actual bill has not yet been introduced (we will provide the text when available), I note a few key takeaways from the article:

  • The reporting burden is placed on the states.  While there is certainly a “gainful employment” genesis to this bill, the focus seems to be on requiring states to provide the information from wage data submitted by employers and graduate data submitted by colleges, tied together by Social Security numbers.  Thus, the reporting burden on already taxed schools would be modest.
  • The data would be gathered with respect to all colleges, without regard to whether they are for-profit or non-profit.  This is something the proprietary sector has been seeking – a chance to be compared to their traditional school competitors on an apples-to-apples, student outcomes basis.  And the results could be interesting.  As the article notes about Virginia, a state that has already started to provide this type of information:

Among graduates who live in Virginia, the highest starting wages for a bachelor’s degree were $56,400 for graduates of Jefferson College of Health Sciences, a Roanoke school that largely turns out nursing graduates.

That was 42% higher than the University of Virginia’s average of $39,648.  Overall, students with associate’s degrees in technical fields, such as health care, earned more than recipients of bachelor’s degrees.  A spokesman for the University of Virginia declined to comment.

  • There is bipartisan support.  According to Sen. Wyden, support for a bill like this is “unusally broad,” and includes the support of House Majority Leader Eric Cantor (R., Va.), who intends to support a companion bill in the House.
  • Outcomes will be a focus in the next few years.  According to a Department of Education spokeswoman, “[p]roviding more information about outcomes will be a priority during President Barack Obama’s second term,” including completing development on a “College Scorecard” that would provide salary information and average debt load information to to existing data on costs, graduates rates and loan repayment rates.

We will report back once the bill language is released.