Melissa Korn and Douglas Belkin, Wall Street Journal
Sydney Frankenberg is considering several schools and multiple majors as she prepares to apply to college. A key question at the top of her list: Which program will land her the best job at the most reasonable cost?
A few years ago, Ms. Frankenberg would have had little to go on in her quest to assess the return on investment for college. But as tuition and student debt skyrocket and many recent graduates get a slow start to their careers, North Carolina this summer joined a handful of states offering students and parents new tools to provide at least partial answers.
“You want to have a good time and learn about yourself,” said Ms. Frankenberg, a 17-year-old senior at the Cannon School in Concord, N.C. “But at the end of four years, you have to get a job and support yourself.”
Return-on-investment calculations have been used by industries such as manufacturing, technology and retail for decades. But such measurements are just now coming to higher education—“grudgingly and brutally,” said labor economist Anthony Carnevale —where they are used to compute how students do later in life. “Education has finally been invaded by 20th and 21st century management practices,” said Mr. Carnevale, who runs Georgetown University’s Center on Education and the Workforce.
Backers of the new tools point to the $150 billion in federal student-aid funds that schools get every year, and to research that shows nearly half of recent graduates are unemployed or have jobs for which they are overqualified.
Many schools say the new calculators can be misleading and argue that higher education’s value goes beyond any dollar figure.
Neither the federal government nor the vast majority of individual schools track ROI, so some states have stepped in, albeit with differing metrics and limited data. Well below half of all college students in many states are accounted for in the data used to create the state ROI calculators, since most are limited to students who attend public institutions, remain in-state after graduation and work for a company that participates in unemployment insurance.
Nevertheless, the results can be illuminating. Indiana released a report last November that breaks down average salaries after graduation by both major and school. A high-school student could, say, compare what a business and marketing major earns on average five years after graduation if he attends Indiana State University ($46,508), Ball State University ($50,222) or Indiana University in Bloomington ($57,930).
Texas, which has more than 1.3 million students in public community colleges and universities, offers two databases with outcomes information, including one that was revamped in October to include debt-to-income ratios and information on graduate students in the University of Texas system.
In September, California Gov. Jerry Brown signed a law requiring the California State University System and requesting the University of California system to provide undergraduate salaries by industry, among other data points.
In Minnesota, where a state-sponsored tool went live in May, Larry Pogemiller, director of the office for higher education, said he has fielded several anxious complaints from college presidents. “Nobody likes somebody looking over their shoulder to find out if they’re getting good results or not,” he said.
Some do. This fall, the University of Akron in Ohio launched a quarter-million-dollar advertising campaign centered on the tagline: “Greatest Lifetime Return on Investment” for any Northeast Ohio Public University, based on a private third-party report.
Private colleges backed a 2008 law that prohibits the federal government from creating a database tying academic records to postgraduate earnings. The ban effectively undermined the creation of a federal ROI college calculator, said Amy Laitinen of the New America Foundation, a nonpartisan, nonprofit think tank.
Critics of such a federal measurement argue the data collection is tantamount to an invasion of student privacy and holds schools responsible for factors beyond their control, such as students who weren’t well prepared when they started or who didn’t study in school.
“Just because you have data points and you can match them doesn’t mean it’s causal,” counters Sarah Flanagan, spokeswoman for the National Association of Independent Colleges and Universities.
Still, support for a federal scorecard with an ROI component has bipartisan support. President Barack Obama is expected to release a ratings system this fall to measure outcomes, among other factors, while Sens. Marco Rubio (R., Fla.), Ron Wyden (D., Ore.) and Mark Warner (D., Va.) have proposed a bill that would collect more information on retention, graduation, debt and employment outcomes.
Meanwhile, 36 states have signed up to contribute to a federally coordinated database that allows state government agencies to query other participants for information about far-flung graduates. But two major destinations for graduates—New York and California—aren’t involved in the project, limiting the system’s potential.
Back in North Carolina, Ms. Frankenberg, who is considering majoring in political science, business or international relations, will take advantage of the new state ROI system—as far as it goes. The tool lets prospective students see as many as 10 years of data on postgraduation employment, wages and continuing-education enrollment for local graduates of the state’s community colleges and public universities. She can see that 48% of political-science and government majors who graduated from the University of North Carolina at Chapel Hill—one of her targets—were employed or enrolled in graduate school in the state five years after graduation, with median annual wages of $36,520.
But she can’t compare that very easily to the ROI for poly-sci students at Tufts University, the U.S. Naval Academy or Carleton College, where she also is applying.
“The schools aren’t telling you what not to major in,” she said. “And major matters.”