Public colleges offer best chance of positive ROI for students, report finds

Diving brief:

  • AttendMost US higher education institutions tend to improve a student’s lifetime earnings, but some for-profit and private nonprofit institutions with programs under two years are less likely to be profitable, according to a report of the Bipartisan Policy Center, a think tank in Washington, D.C.
  • Public colleges and universities are the most likely to give students value for money, with 96.3% offering a positive median return on investment. This compares to 81.2% of establishments in all sectors. Has myg Private non-profit institutions, 89.5% showed a positive median return on student investment. For-profit colleges were the worst, with only 41% giving a positive median return.
  • The report calls on the federal government to consider whether an institution provides students with a positive return for their time and money before allowing it to receive federal financial aid.

Overview of the dive:

Education advocates have pushed for tougher accountability for colleges that fail to prepare students for success, particularly because most colleges receive federal aid dollars. In January, more than a dozen experts and higher education organizations appeals to the US Department of Education exercise stricter oversight of accreditors and how they deal with colleges with poor student performance.

The Bipartisan Policy Center report encourages policymakers to create and use more detailed institution-level analyzes when evaluating colleges.

Center researchers have developed a model to examine the return on college investment while addressing discrimination in the labor market. Since women and underrepresented minorities earn less money on average after graduation, institutions with diverse student populations could be penalized if they are not rated on a curve.

“Our adjustments assume that everyone has had their post-college earnings inflated to match the earnings of a typical white male at their same institution,” said Kevin Miller, associate director of higher education at the Bipartisan Policy Center and co. -author of the report, during an online roundtable on Tuesday. He called the estimate a bit clumsy but essential, given that the Department of Education cannot currently break down income data by race, ethnicity and gender.

The researchers looked at historically black colleges and universities as a separate category and found that 88.8% of HBCUs provide their students with a positive median return on investment. If adjustments for wage inequality and government grants reducing the cost of student attendance had not been adjusted, it would have been only 48.3%.

The report also called for changes to federal policy to allow for more specific assessments of college student outcomes. His other recommendations include standardizing how institutions calculate the cost of college attendance and better regulating institutions that repeatedly pose a financial risk to students and taxpayers.

A higher education expert who has focused on the return on investment of a college degree pointed to information in the report about institutions with a negative return on investment. The report found examples of institutions categorized as for-profit colleges, non-profit institutions, and public vocational institutions that show negative median returns on investment. Non-degree-granting, for-profit institutions were the least likely to show a positive median return on investment, with only 35% of them.

“One finding that jumped out at me was the number of colleges with a negative return on investment,” said Martin Van Der Werf, director of editorial and education policy at the Center on Education and Workforce. from Georgetown University. “We can probably all agree that if you go to college and end up earning no more than a high school graduate, it probably wasn’t worth it.”

Earlier this year, the Georgetown Center published a report on the return on investment at the institutional level, specifically for low-income students. For this group, the report found that public colleges focused on granting bachelor’s degrees had the best median returns.

According to Van Der Werf, more information, especially regarding demographic breakdowns, can only help stakeholders assess college student outcomes.

“There’s a real groundbreaking nature to having this data available,” Van Der Werf said. “Over the next decade, this could really have a big impact on how people, political leaders, lawmakers, and consumers assess the value of a college.”

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