Payscale's higher ed ROI rankings balance discussion of college cost
Along with return on investment, the company provides tailored reports through Alumni Analytics
Nearly one-third of college graduates who responded to a recent Study.com online survey said the cost of tuition and the prospect of debt affected their decision about where to go to college. The survey reached recent grads, ages 21 to 35.
There is no doubt cost is a major factor when it comes to higher education decision-making. Student debt has become a national policy fight, and the U.S. Department of Education is defending its right to withhold federal funding from programs whose graduates, in large numbers, default on their debt. The department’s proposed rating system was going to take into account alumni outcomes in assessing colleges and universities, and its College Scorecard already encourages prospective students to ask institutions about the jobs alumni get and how much they’re typically paid.
While less well-known than other college rankings, Payscale provides annual lists of the country’s best colleges based on return on investment. The 2015 ranking places little-known schools at the top of the ROI continuum, finding the nation’s elite schools aren’t always the best choice if future financial success is the top priority.
Harvey Mudd College in Claremont, Calif., has topped the list for several years now, providing its average graduate a nearly $1 million return on investment over 20 years. Payscale claims a confidence interval of plus or minus 5% on most schools and plus or minus 10% on elite schools and small liberal arts colleges. Harvey Mudd focuses on science, engineering, and math fields, offering students these majors with a liberal arts base.
“What this list really shows is that what you study has an even bigger impact on your outcome than where you go to school,” said Payscale Senior Editorial Manager Aubrey Bach.
Students graduating with degrees in STEM fields generally receive higher-paying job offers than their peers. It makes sense, then, that schools graduating more engineers have higher returns on investment. That information is helpful for students deciding what to do and where to spend their tuition dollars.
It also helps colleges decide how to spend their own money and how to market their programs.
Payscale recently launched Alumni Analytics, a service for colleges in which Payscale conducts a survey of alumni to track outcomes. The survey can go to recent grads or the entire group of living alumni, providing data across all levels of a graduate’s career. Payscale then connects that data with its massive database of existing salary information from people who have visited its website and taken a salary survey to get a free report placing their wages in the context of other similar workers. The Alumni Analytics final report tells colleges how their graduates are doing and compares them to national averages.
At Clarkson University, where administrators signed on to participate in Payscale’s pilot of the new program, the alumni earnings report confirmed some of the internal data the university already collected and also provided new insights.
Kelly Chezum, associate vice president for external relations, said the Payscale analysis brought to light new information about job satisfaction, and it found that Clarkson’s alumnae earn more than the national average across degree programs and at all points in their degree.
“That’s just a terrific statistic for women who graduate from Clarkson,” Chezum said.
It is also a new recruiting tool for prospective female students.
Clarkson University may cost $214,000 over the course of a four-year degree, but ROI forecasts can help convince students and their families that the cost is worth it.
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