WASHINGTON (AP) — For a generation of juvenile Americans, deciding where to go to college — or whether to go to college at all — has become a convoluted cost-benefit calculation that often comes down to a single question: Is the degree worth the price?
Public trust in higher education has declined in recent years due to high tuition costs, skyrocketing student loans and a bleak job market, as well as ideological concerns from conservatives. Now colleges are scrambling to prove their worth to students.
Borrowed from the business world, the term “return on investment” can be found on college advertisements across the United States. A series of modern rankings rate campuses based on the financial benefits they offer. States like Colorado have begun releasing annual reports on college financial viability, and Texas now includes them in its calculations of how much tax money goes to community colleges.
“Students are becoming more aware of times when college isn’t worth it,” said Preston Cooper, who has studied college ROI at the American Enterprise Institute, a conservative think tank. “It’s a priority for universities today in a way that it wasn’t necessarily the case 15 or 20 years ago.”
Most bachelor’s degrees are still worth it
A lot of research suggests that a bachelor’s degree is still worthwhile, at least on average and in the long run. Still, there’s a growing realization that not all degrees lead to a good salary, and even some that seem like good choices are becoming increasingly risky as graduates face one of the toughest job markets in years.
A modern analysis released Thursday by the Strada Education Foundation finds that 70% of recent public university graduates can expect a positive return within 10 years — meaning their earnings over a decade will exceed that of a typical high school graduate by an amount that exceeds the cost of their degree. However, the percentage varies by state, from 53% in North Dakota to 82% in Washington, D.C. The report found that states where college is cheaper fared better.
“It’s a critical issue for families who wonder how college tuition could ever be worth it,” said Emilia Mattucci, a high school counselor at East Allegheny schools, near Pittsburgh. More than two-thirds of her school’s students come from low-income families, and many are unwilling to take on the debt that previous generations accepted.
Instead, more students are attending technical or vocational schools and forgoing four-year universities, she said.
“A lot of families just say they can’t afford it or they don’t want to be in debt for many years,” she said.
Education Minister Linda McMahon was among those who questioned the need for a four-year degree. In a speech to the Reagan Institute think tank in September, McMahon praised programs that prepare students for careers straight out of high school.
“I’m not saying kids shouldn’t go to college,” she said. “I’m just saying that not all kids have to go to be successful.”
Reducing tuition fees and improving graduate earnings
American higher education struggles with both sides of the ROI equation – tuition and graduate income. This becomes even more vital as colleges compete for a withering number of college-age students due to withering birth rates.
Tuition has remained unchanged at many campuses in recent years to address affordability concerns, and many private colleges have reduced their sticker prices to better reflect the costs most students actually pay after financial aid is taken into account.
The other part of the equation – ensuring graduates get good jobs – is more complicated.
A group of college presidents recently met at Gallup headquarters in Washington to study public polling on higher education. One of the main reasons for the decline in trust is the perception that colleges are not giving their graduates the skills that employers need, said Kevin Guskiewicz, president of Michigan State University and one of the leaders of the meeting.
“We’re trying to get ahead of it,” he said.
The issue has been a priority for Guskiewicz since he arrived on campus last year. He gathered a council of Michigan business leaders to identify the skills graduates need for jobs ranging from agriculture to banking. The aim is to adapt study programs to the needs of the labor market and to provide students with internships and professional experience that can lead to a job.
A separation from the labor market
Closing the labor market gap has been an uphill battle for U.S. colleges, said Matt Sigelman, president of the Burning Glass Institute, a think tank that studies the workforce. Last year, the institute, working with Strada researchers, found that 52% of recent college graduates had jobs that didn’t require a degree. Even in high-demand fields such as education and nursing, there were huge numbers of graduates in this situation.
“No program is immune and no school is immune,” Sigelman said.
The federal government has been trying to solve the problem for decades, dating back to the administration of President Barack Obama. A federal rule first introduced in 2011 sought to cut federal funding for college programs that provide low-income graduates, although it primarily targeted for-profit colleges.
A Republican reconciliation bill passed this year takes a broader view, requiring most colleges to meet merit standards to be eligible for federal funding. The goal is to ensure that college graduates end up earning more than those without a degree.
Others see transparency as a key solution.
For decades, students hardly had the opportunity to know whether graduates of certain courses would get good jobs after completing their studies. That began to change in 2015 with College Scorecard, a federal website that publishes general income results for college programs. More recently, bipartisan legislation in Congress has sought to provide even more detailed data to the public.
North Carolina lawmakers have commissioned a 2023 study on the financial return on degrees from the state’s public universities. It was found that 93% provided a positive return, meaning graduates were expected to earn more over their lifetime than someone without a similar degree.
The data is available to the public and shows, for example, that bachelor’s degrees in applied mathematics and business administration from the University of North Carolina at Chapel Hill tend to yield high returns, while master’s degrees in psychology and foreign languages often do not.
“Colleges are slow to recognize how important this type of data is to students and their families,” Lee Roberts, chancellor of UNC-Chapel Hill, said in an interview.
“In uncertain times, students are – I would rightly say – even more focused on their career prospects,” he added. “So I think colleges and universities really owe students and their families this data.”
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