Dive Brief:
- Payscale’s 2016 College Return on Investment Report includes damning characterizations of the value of higher education at certain schools based on tuition, average loan amount and graduate earnings.
- The Street reports some schools in the report had a 20-year net ROI close to $1 billion, while private liberal arts school Shaw University in Raleigh, NC, tied the Alabama public University of Montevallo for out-of-state students, producing a 20-year net ROI of -$110,000.
- The Payscale report includes rankings for 962 public and private schools with public schools listed twice, once for the ROI for in-state students and once for the ROI of out-of-state students, and the calculation is based on typical earnings potential for students who graduate within four years.
Dive Insight:
A majority of students take rankings into account when they consider their postsecondary options. US News & World Report, as the most well-known ranking system, has been accused of negatively impacting the entire higher education system by producing perverse incentives for schools. Payscale, as a relatively new entrant into the rankings game, has gotten attention for focusing on a particularly popular new metric: return on investment.
Students who graduate with loans are breaking records each year as the average debt load continues to rise. The ROI conversation is encouraging schools to collaborate with industry leaders to tailor their programs to real needs in the labor market, making sure students are ready for their first job. Many educators worry this focus will reduce students’ preparation for jobs that haven’t even been created yet. But as college leaders are forced to compete for students, a focus on ROI may become a key way to succeed.