Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

There’s been a lot of commentary on the “College Scorecard” – the Obama Administration’s new tool that is designed to help students and families make intelligent choices about college.   As my colleague David Lewis noted previously, the Scorecard focuses on:

• the average net price to attend (and the change in net price from 2007-2009);
• the graduation rate;
• the three-year loan default rate; and
• the median amount borrowed for undergraduate study and monthly payment required to pay that amount off in ten years.

A number of experts have weighed in with excellent criticisms of this approach. Abigal Seldin has argued that the average net price is inferior to the net price calculators and using average net price may provide misleading information to students, particularly from poor families.  In another article, five different higher education experts weighed in on a number of flaws with the Scorecard, including its use of the government’s graduation rate metric, the use of the default rate as opposed to a repayment rate, and the use of a median amount borrowed as opposed to a metric that offers a clearer picture of the number of students at the institution with excessive debt.  This is in addition to other arguments about how the value of an education or the worth of an institution of higher education is not reflected in metrics like cost and likelihood of graduation, how information about faculty and faculty workload should be included, or even arguments that government should let the private sector provide this information to families.

The Scorecard also includes a section covering “What kinds of jobs do students have when they graduate?” but this section has no data and is still under development.  Presumably, this is because the Department of Education lacks the sufficient legislative or regulatory basis to collect this data.  As The New York Times points out, “PayScale, a company that analyzes payroll data for millions of workers, publishes annual rankings of colleges based on graduates’ long-term earnings.”  This source could this serve as the basis for the data for many colleges – and expansion through payroll providers like ADP and Paychex could make it even more robust.

In addition, PayScale provides salary data for graduates of a four-year program (those with higher degrees are excluded) both upon graduation and after ten years in the workforce.  This feature provides a much clearer picture of the overall return on investment in a degree from a particular college and should form the basis of any metric promoted by the government.  Providing this range addresses one of the biggest problems with graduate salary data: determining the years on which to focus.  While some, like Mark Kantrowitz have focused on the salary upon graduation — typically as a metric used to determining the ability to repay loans – and the Department of Education focused on salary in the third and fourth years upon graduation in the gainful employment metric, focusing on the early years after graduation tends to make certain degrees – such as liberal arts – unfairly appear far less valuable.  As the PayScale data suggests, many liberal arts graduates – such as from Haverford College – experience a significant jump in salary between the first and tenth year after graduation.  Indeed, according to PayScale, while Haverford graduates can expect a $37,500 salary on average after graduation, the salary in the tenth year averages $98,700.  Thus, providing the these salary data points provides a more accurate picture of the economic value of a degree and, consequently, provides a firmer basis for students and families to make decisions about colleges.  It also

Certainly, return on investment is only one of many factors to be considered in choosing a post-secondary institution - and a ”vocationally focused” one at that.  Finding an institution to help advance a student’s goals best needs to encompass more than a simple number can express.  The data PayScale has put forth, however, does provide an important tool for students and families and the provision of the first and tenth year salary data would be well worth considering as the administration revises the College Scorecard.