Greater Accountability Can Save Higher Education from its Present Crisis
Is college worth it? On average, we know, the answer is yes. But public concern over the cost of higher education is bound to intensify now that the coronavirus pandemic has temporarily shut down the residential college system and ravaged the job market.
In the minds of many Americans, higher education already has a reputation problem — too expensive, and often ineffective at teaching skills that translate into good jobs.
Now that dads and moms are facing job loss and cratering retirement funds, that $70,000-a-year price tag for Junior’s college starts to look suspiciously high. A quarter million bucks is a lot for an entry-level job credential. With unemployment rates already at historic levels, those families are now wondering if there are even going to be any jobs left when Junior graduates.
To be sure, the promise of a better job is only one measure of the worth of a college degree; but for many families, it remains the most important measure. College usually pays off in the long run, opening the door to a lifetime of higher earnings potential. But for a minority of students, higher education turns out to be a financial disaster, with mountains of debt and poor job prospects.
Not all college degrees are created equal.
When higher education doesn't deliver, it's a real problem, especially for low-income students who take on student debt only to find that their chosen course of study didn't produce the job opportunities they had hoped for. Parents and students need to understand the financial cost and likely future benefit of a specific major at a college or university beforehand.
The Department of Education’s College Scorecard offers students and families an easy way to see what attending degree program costs, how much debt the average students graduates with, and what the median salary of former students is one year after graduation. For instance, Ohio State University has an average net cost of about $18,000 per year, after financial aid, and a median starting salary ranging between about $19,800 and $71,800, depending on the major you choose. That’s a pretty big disparity.
An engineering major at Ohio State can expect a starting salary of about $71,800, while a dance major can expect to earn only $19,800. Those two degrees cost essentially the same amount in tuition and room and board, but clearly produce very different economic outcomes.
For students who are considering for-profit institutions or Career and Technical Education programs that offer vocational training and certificate programs, the Scorecard data is also helpful. It may enable students avoid programs that are less likely to produce a good return on investment.
A Brookings study found that, in most cases, debt levels were higher and average earnings were lower at for-profit institutions than at public ones. But that’s not always the case. Some for-profit certificate programs, in cosmetology, for instance, outperform similar programs at public institutions. Using our example above, a hypothetical student who was considering a cosmetology program at the Ohio State Beauty Academy as an alternative to pursuing a dance degree at Ohio State University would find that the earnings potential for each program is very similar but the latter program costs about nine times more.
It's true that education can’t be measured merely in financial terms. But, in a time of economic crisis, this kind of accountability can only help the reputation of those programs that are providing a good return on investment for their graduates. We can strengthen public trust in higher education by culling out the bottom feeders.
Moreover, since most student loans are subsidized by the federal government, there is a public interest to helping students avoid programs that are not likely to produce an economic benefit.
The question, “Is college worth it?” is really a silly question. It’s like asking: Is buying a stock worth it? It depends. If you’re buying stock in a company that has a cure for coronavirus — that’s one thing. If you are buying stock in a company that sells bat soup — that’s another.
We know that a college degree pays off most of the time — but parents and students need to be aware that choosing a college program is a lot like going to the grocery store. There are both good and bad choices out there. Twinkies and Ding-Dongs, for instance, are not equivalent to a spinach salad or a bowl of beans and rice. Students need the kind of information provided in the College Scorecard in order to avoid the “junk food aisle” in higher education, consisting of low-quality programs that offer poor financial prospects.
Just as nutrition labels deliver accountability for the ingrediants companies put into food, the data presented in the College Scorecard delivers accountability for the quality and value of the education colleges and universities offer. This kind of transparency should be embraced. In a time of great economic uncertainty, greater accountability can strengthen Americans’ confidence in higher education and reinforce the reputations of the programs and institutions that are delivering on higher education’s promise of greater opportunity for all.