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for a generation of youth AmericansChoosing where to go to college – or whether to go at all – has become a complex calculation of costs and benefits that often revolves around a single question: Is the degree worth its price?
Public confidence in higher education has declined in recent years due to high tuition prices, skyrocketing student debt and a depressed job market – as well as the ideological concerns of conservatives. Now, colleges are struggling to prove their value to students.
Borrowed from the business world, the term “return on investment” has been plastered on college advertisements across America, a series of new rankings grad campuses based on financial return. like state colorado has begun publishing annual reports on the college’s monetary payouts, and texas Now include this in your calculations of how much taxpayer money goes to community colleges.
“Students are becoming more aware of the times when college doesn’t pay off,” said Preston Cooper, who studies college ROI at the American Enterprise Institute, a conservative think tank. “It’s front of mind for universities today in a way that it wasn’t necessarily 15, 20 years ago.”
Most graduate degrees are still worth it
A wide body of research indicates that a bachelor’s degree is still beneficial, at least on average, and in the long run. Yet there is growing recognition that not all degrees lead to good salaries, and even some that seem like a good bet are becoming riskier as graduates face one of the toughest job markets in years.
A new analysis released Thursday by the Strada Education Foundation shows that 70% of recent public university graduates can expect positive returns within 10 years — meaning their earnings in a decade will exceed the cost of their degree compared to a typical high school graduate. Yet this varies by state, ranging from 53% to 82% in North Dakota. WashingtonD.C. states where colleges are more affordable fared better, the report said.
It’s a serious issue for families who wonder how college tuition prices can ever be paid off, said Emilia Mattucci, a high school counselor at East Allegheny Schools near Pittsburgh. More than two-thirds of his school’s students come from low-income families, and many are unwilling to take on the level of debt that previous generations accepted.
Instead, he said, more people are heading toward technical schools or trades and enrolling in four-year universities.
“A lot of families are just saying they can’t afford it, or they don’t want to be in debt for years and years,” he said.
Education Secretary Linda McMahon Has been one of the first to question the need for a four-year degree. Speaking at the Reagan Institute think tank in September, McMahon praised programs that prepare students for careers right out of high school.
“I’m not saying kids shouldn’t go to college,” she said. “I’m just saying that not all kids need to move forward to be successful.”
Lowering College Tuition and Improving Graduate Earnings
American higher education is struggling with both sides of the ROI equation – tuition costs and graduate earnings. This is becoming even more important as colleges compete to make up for the declining number of college-age students as a result of the falling birth rate.
Tuition rates on many campuses have remained stable in recent years to address affordability concerns, and many private colleges have lowered their sticker prices in an effort to better reflect the costs actually paid by most students after factoring in financial aid.
The second part of the equation – ensuring that graduates get good jobs – is more complicated.
A group of college presidents recently met at Gallup’s Washington headquarters to study public polling on higher education. Michigan State University President Kevin Guskiewicz, one of the leaders at the meeting, said a main reason for low confidence is the perception that colleges are not giving graduates the skills employers need.
“We’re trying to get ahead of that,” he said.
The issue has been a priority for Guskiewicz since arriving on campus last year. He assembled a council of Michigan business leaders to identify the skills needed for graduates for jobs ranging from agriculture to banking. The goal is to adapt degree programs to the needs of the job market and for students to obtain internships and work experience that can lead to employment.
Isolation from the job market
Bridging the gap in the job market has been an ongoing struggle for American colleges, said Matt Sigelman, president of the Burning Glass Institute, a think tank that studies the workforce. Last year the institute, partnering with Strada researchers, found that 52% of recent college graduates were in jobs that did not require a degree. Even in that case there were large numbers of graduates in high-demand fields like education and nursing.
“No program is immune, and no school is immune,” Sigelman said.
The federal government, starting with the administration of President Barack Obama, has been trying to fix the problem for decades. A federal rule first instituted in 2011 was intended to cut federal funding for college programs that leave out low-income graduates, though it primarily targeted for-profit colleges.
The Republican reconciliation bill passed this year takes a broader approach, requiring most colleges to meet income standards to be eligible for federal funding. The goal is to ensure that college graduates earn more than graduates without a degree.
Others see transparency as a key solution.
For decades, students had little way of knowing whether graduates of specific degree programs were finding good jobs after college. This began to change in 2015 with the College Scorecard, a federal website that shares comprehensive earnings results for college programs. Recently, bipartisan legislation in Congress has sought to provide even more detailed data to the public.
North Carolina lawmakers ordered a 2023 study on the financial returns to degrees at the state’s public universities. It found that 93% produced positive returns, meaning graduates were expected to earn more over their lifetime than someone with the same degree.
Data available to the public, for example, show that graduate degrees in applied mathematics and business yield high returns at the University of North Carolina at Chapel Hill, while graduate degrees in psychology and foreign languages often do not.
Colleges are belatedly realizing how important this kind of data is to students and their families, UNC-Chapel Hill Chancellor Lee Roberts said in an interview.
“In uncertain times, students are even more focused on – I would say correctly – what their job prospects will be,” he said. “So I think colleges and universities should really be giving this data to students and their families.”
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