The acceptance letters have all come in, and now the deadline for most hopeful college applicants to make a final decision looms over the horizon. A string of studies, though, is showing that college hopefuls’ decision making process is not the same as it used to be.
In the past, most people believed that getting into a better school meant better career opportunities. Nowadays, it doesn’t matter if a job applicant has a degree from lofty UCLA or from the less prestigious Sonoma State, because experience, academic performance, and skills all matter more to employers.
Studies on college selection have focused now on the comparison of graduates’ earnings. Economists Stacy Berg Dale and Alan Krueger published a popular study in 1999 that contrasted the various earnings of more prestigious institutions with “moderately selective schools.” The latter group was made up of students who’d been accepted into elite schools, but choose to go elsewhere. The study found that after 20 years, the earnings of each group had little to no difference. A follow up study published in 2011 had similar results.
The problem here is that those who went to the more elite schools also had to pay more for their education, only to wind up earning the same amount as their peers. This means that those who attended more affordable, less selective colleges wound up getting a better ROI on their degrees–they got just as much out of their education, but for less.
PayScale, a salary listing website, releases an annual list of over 1,200 colleges ranked in terms of ROI. For those lucky applicants who have been accepted into a number of different schools, the site could help them find the most economically pragmatic option.
Of course, what students will earn once they’ve graduated is only part of the picture. Other important factors like vocational satisfaction and the societal value of a career are much more challenging to quantify. For example, a community activist might earn far less than a copywriter, but have more overall satisfaction. This begs the question: Which is more important? Do college hopefuls need to compromise?
“It’s a very large investment. You want a solid ROI because you’re going to be putting in a great deal of money, time and energy,” explains Nicole Oringer, MA, EdM at Ivy Ed. “It’s a large life decision, and has implications for everything going forward. The most important thing when you start looking for a college is to learn how to be a good consumer during the process. There’s a lot of different ways to look at ROI, and part of being a good consumer is to do some research on where students have gone after attending certain institutions. You need to dig deeply.”
Yet, life after college looks rather bleak today, making a practical choice seem more appealing. It’s been five years since the Great Recession ended, and according to a report from the U.S. Department of Labor, the job market has only just returned to the same level it was at in 2008. Despite the positive growth, the level is simply not where it needs to be to put millions of Americans back in work, let alone accommodate college graduates entering the workforce in their designated field. According to research from the Center for College Affordability and Productivity, about 50% of recent college grads are working jobs that require no further education, meaning their degrees are essentially useless.
Though it’s not as romantic to choose a college based on its ROI, it’s definitely the practical thing to do in this sluggish economy.