Archive for ‘value of college’

September 9, 2014

Look at this chart before enrolling in college

by Grace

The bottom quarter of earners with a college degree don’t make more money than the average high school graduate. And this hasn’t really changed much in 40 years.

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This chart may explain why “college isn’t for everyone”, but additional considerations are important.

… First, we don’t know for sure how much money this bottom quarter of degree-holding earners would have made without their college education. Furthermore, much of this could boil down to career choice: there are many jobs that require a degree but don’t pay very well. If someone earns a degree for reasons beyond making more money, it could be that the upfront investment is worthwhile regardless.

“On ‘average’, it’s still worth going to college”, but be careful about making personal decisions on the “average” case.

Here’s some good advice:

In the meantime, students who are unsure of what they want to study or do are probably best advised to be very cost-conscious when choosing a college, and to be unafraid to wait until they are sure how they will use their degree before they start to pursue one.

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Chris Matthews, “Why college isn’t for everyone, explained in a single chart”, Fortune, September 5, 2014.

July 23, 2014

Sarah Lawrence College will rate itself on the value it provides students

by Grace

Sarah Lawrence College has developed a way to assess the value it offers its students.

… The faculty came up with six abilities they think every Sarah Lawrence graduate should have….

  1. Ability to think analytically about the material.
  2. Ability to express ideas effectively through written communication.
  3. Ability to exchange ideas effectively through oral communication.
  4. Ability to bring innovation to the work.
  5. Ability to envisage and carry through a project independently, with appropriate guidance.
  6. Ability to accept and act on critique to improve work.

These measures serve as an antidote to the Obama administration’s upcoming rating system, which will measure things like cost, graduation rates, and salaries of graduates.  Obama’s new system has generated controversy, particularly since poor scores could mean the loss of federal financial aid.

Sarah Lawrence developed a “web-based assessment platform, designed to measure student performance against these critical abilities”.  Advisors meet regularly with students to evaluate their progress.

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Students can learn if they’re getting “their money’s worth”.

That’s a different measure of the value of an education than, say, student loan debt or earnings after graduation — the sorts of things the Obama administration is considering as part of its ratings plan. Students and parents are right to ask if they’re getting their money’s worth, says the college’s president, Karen Lawrence. After financial aid, the average cost of a Sarah Lawrence education is almost $43,000 a year.

“People are worried about cost,” Lawrence says. “We understand that.”

And they’re worried about getting jobs after graduation. But she says the abilities that the new assessment measures—critical thinking and innovation and collaboration—are the same ones employers say they’re looking for.

I have a feeling every Sarah Lawrence graduate will be rated highly.

The idea behind Sarah Lawrence’s assessment is laudable, but I must say I’m a bit skeptical about the way they measure student performance.  Shouldn’t they have an objective third party doing the assessment?

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Amy Scott, “What do students actually learn in college?”, Marketplace, April 22, 2014.

June 24, 2014

Only about 55% of the college wage premium comes from actually attending college

by Grace

The Cato Institute recently hosted a forum on the question, “Is College Worth It”?

Featuring Bryan Caplan, Professor of Economics, George Mason University, and Adjunct Scholar, Cato Institute; Beth Akers, Fellow, Brown Center on Education Policy, Brookings Institution; and Neal McCluskey, Associate Director, Center For Educational Freedom, Cato Institute; moderated by Chip Bishop, Director of Student Programs, Cato Institute.

Soaring tuition and student debt, the rise of high-tech alternatives, and a persistently sluggish economy have provoked a startling question: “Is college worth it?” It’s a question that raises many others: Must I go to college to learn skills I’ll need for my career? Is just getting a degree — any degree — the key to my future prosperity? Should higher education be about marketable skills, or is it about personal fulfillment and expanding human knowledge? These questions disconcert students, parents, and taxpayers alike….

According to Caplan, who took the podium first, approximately 55% of the college wage premium is attributable to the college degree.  The individual student is actually responsible for a significant percentage of the higher wages attributed to college graduates.

College grads typically arrive on campus with big labor market advantages. The typical college grad was unusually employable even before they started college.

The choice of major and the probability of graduation are two important factors that influence the college premium.

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The ‘concert effect’

Caplan also discusses the “concert effect” caused by the growing rate of college completion.  Similar to what happens at a concert when some members of the audience stand up, everyone else has to follow in order to enjoy the performance.  Can you see better when you stand up?  Not really, but you are forced to stand because everyone else is doing the same.  Does a college degree make you a better employee?  Not really, but we feel compelled to go to college because “everyone” else is doing it.

The forum podcast is available at the Cato site.  More topics are covered, including the sheepskin effect, why college professors never have to check IDs, and how college is a four-year party for most students.

 Related:  “Let’s be clear, going to college is not always ‘worth it’” (Cost of College)

June 17, 2014

Proliferation of master’s degrees produces wasteful ‘credential inflation’

by Grace

The master’s degree is the fastest-growing college credential in this country, but is that a good thing?

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Eight percent of the population now holds Master’s degrees, the same percentage that held bachelor’s degrees (or higher) in the 1960s, reports Vox. Master’s degrees in education were by far the most popular, holding at around a third to a quarter of all such degrees from 1971 to 2012, though MBAs had taken the top spot by 2010. In fact, the increase in the number of MBA degrees is astonishing: Only 11.2 percent of master’s degrees were in business in 1971, but in 2012, they were a whopping 25.4 percent.

This “credential inflation” is “in large part driving the student loan crisis”.

The rise of the master’s degree is likely a product of credential inflation. As more and more people acquire bachelor’s degrees, those who wish to make themselves stand out go on to get the MA. And as Vox points out, while a Master’s degree does have a positive impact on earnings, the overall debt of people with undergraduate and Master’s degrees has grown markedly in the past decade. In fact, as we recently noted, graduate student debt is in large part driving the student loan crisis.

The recently expanded loan forgiveness program is “tailor-made for graduate students”.

Students who took out big loans for graduate school and those with higher incomes stand the most to gain financially under President Obama’s expansion of the federal government’s loan forgiveness program.

Lawyers, doctors and other highly trained professionals who utilized federal loans throughout their post-high school education could walk away with most or all of their graduate school debt forgiven by the federal government under the program, say experts.

Is this good for our economy?

… But we shouldn’t want an economy that favors people with polished résumés over people with good ideas. This data is not a good sign for our economic health.

It seems to be another case where excessive government intervention has created inefficiencies resulting in unintended consequences

Public support for higher education helps to create unnecessary barriers in many fields where advanced degrees are now required credentials. … Neal McCluskey argues that “cheap college has almost certainly fueled credential inflation, not major increases in knowledge or skills.”

ADDED 6/17/14:

Advanced degrees don’t generally improve student achievement levels.

A number of studies have shown that teachers with advanced degrees don’t, necessarily, produce higher student achievement than teachers who hold only a bachelor’s….

One study from the Center for American Progress reported “that states waste money by giving salary increases to teachers as a reward for getting a master’s degree, spending nearly $15 billion annually on such pay hikes”.

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Randy Olson, “College degrees awarded per capita in the U.S.A.”, Randal S. Olson, June 12, 2014.

Walter Russell Mead, “The Rise of the Master’s Degree”, The American Interest, May 22, 2014.

Susan Ferrechio, “The surprising winners of Obama’s student-loan program”, Washington Examiner, June 12, 2014 .

Tyler Durden, “Unintended Consequences Of Obama’s Student Loan Policies”, Zero Hedge, June 13, 2014.

Ida Lieszkovszky, “Liberal Think Tank says Advanced Degrees Don’t Make Better Teachers”, StateImpact Ohio, July 18, 2012.

June 9, 2014

‘Useless’ college degrees

by Grace

Randye Hoder explains “Why I Let My Daughter Get a ‘Useless’ College Degree”.

Hoder, whose daughter is an American Studies major, had tired of trying to “rationalize how Emma’s chosen path will turn into a steady paycheck”.

Yet the more I’ve thought about it, the more I’ve decided to be honest. “I’m not sure what Emma is going to do,” I now say. “But she’s gotten a great education and has really found her passion — and I know those things will serve her well over the course of her life.”

But what about supporting yourself after graduation, and paying off student loans?  Is following your passion restricted to rich people who can rely on their parents to supplement their lifestyle after graduation?

The trend is to measure the value a college education by the salaries of recent graduates.

It has become practically quaint these days to think of institutions of higher learning as places that teach students to think critically and analytically, read widely and write well. More and more, schools are being measured by, among other things, the salaries of their recent graduates. The Obama Administration has only reinforced this bias by proposing to rank colleges based, in part, on how much money graduates earn.

A rigorous liberal arts education can pay substantial dividends in the form of a satisfying and lucrative career.  Okay, maybe not always lucrative.  It’s arguable.  But the point is that liberal arts core skills are useful in the workplace, especially considering that the workplace is constantly changing.  Unfortunately, there is a serious problem with this idea.

In theory, a college liberal arts degree is a valuable commodity in the job market. In reality, the way colleges have diluted the curriculum means a liberal arts degree offers little added value in qualifying workers for today’s job market.

Anyway, I’m curious to know if Hoder’s daughter ever found a job.  I’d like to know what kinds of jobs liberal arts graduates are getting these days.  Based on what I’ve seen, many of them who see a dismal job market decide to go on to graduate school.

Related:  “Colleges are promoting the liberal arts as a path to a good career” (Cost of College)

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Randye Hoder, “Why I Let My Daughter Get a ‘Useless’ College Degree”, Time, January 16, 2014.

June 5, 2014

Finding your spouse while in college

by Grace

Facebook data offers some information about users whose spouses attended the same high school or college.

  1. 15% of individuals attended the same high school as their spouse …
  2. About 28% of married college-graduates attended the same college….
  3. 12 of the top 25 colleges for women also make it into the top 25 for men….

Religion, STEM, and military service

For Facebook women, the top schools for meeting future husbands are either affiliated with religion or specialize in STEM education.  Some service academies also made the list.  All this makes sense.

Top 25 colleges where women find spouses

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For men, religious schools are the top ones for meeting future wives.

Although this study has its limitations, it offers some insight that may be useful for those who want to find a spouse while in college.  Susan Patton, the Princeton mother who advised women to “find a husband on campus before you graduate”, might agree.

Keep in mind that the Internet has surpassed college as a way to meet marriage partners.

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June 2, 2014

Let’s be clear, going to college is not always ‘worth it’

by Grace

There has been pushback on David Leonhardt’s message that going to college is “clearly” a smart economic choice.

 

Matthew Yglesias is critical of Leonhardt’s conclusion.

… I don’t see how this kind of data can possibly support the wide-ranging conclusions Leonhardt draws about whether or not college is “worth it.” After all, this isn’t the outcome of a randomized trial.

Maybe everyone should buy a BMW.20140531.COCBMW2

Suppose I got someone to make a chart showing the incomes of prime-age BMW drivers versus average Americans. It would reveal a large BMW earnings premium. I could even produce a chart showing that the children of BMW drivers grow up to earn more than the average American. But that wouldn’t be evidence that BMWs cause high wages, and that the BMW Earnings Premiums extends across multiple generations. It would be evidence that high-income people buy expensive cars and that there’s intergenerational transmission of socioeconomic status.

To understand whether college is “worth it” — or, more precisely, which colleges are worth it to which students — we would need some much more fine-grained data. How do college graduates fare in the labor market compared to people who were otherwise similar at age 18 in terms of SAT scores, non-cognitive skills, parental socioeconomic status, etc?

Yglesias sees a need for better apples-to-apples comparisons.

Ben Casselman points out that you have to graduate to reap the benefits of going to college.

But just because people who graduate from college are better off doesn’t necessarily mean that going to college is a good decision. Most of the benefits of college come from graduating, not enrolling. Indeed, as Leonhardt pointed out, the wage premium for people with some college but no degree has been stagnant, even as debt levels have been rising. That means that people who start college but drop out may be worse off than people who never enrolled in the first place. Any attempt to answer the “Is college worth it?” question, therefore, has to grapple with not only the value of a degree, but the likelihood of obtaining one.

For many students, the odds aren’t good. Less than 60 percent of full-time students who are enrolled in college for the first time graduate within six years. Part-time students have an even lower completion rate, as do racial minorities and older and low-income students. For some groups, the six-year graduation rate is well under 20 percent. The vast majority of Americans from advantaged backgrounds enroll in college, so the students struggling with the “Should I or shouldn’t I?” question are disproportionately members of groups with low graduation rates.

Marginal students in particular may not find that going to college is clearly a superior choice, according to the Center for Economic and Policy Research.

Leonhardt’s analysis ignores the dispersion in pay among college grads, especially among men. Research by my colleague John Schmitt and Heather Boushey shows that near one in five recent male college grads earned less than the average high school grad. This implies that going to college implies substantial risks, especially since attending college is likely to lead to substantial debt. There is also a risk that a student will not complete college, which is especially likely for the marginal college student (a person at the edge of deciding whether to try college or not). It is also likely that the marginal college student faces a much higher risk of being in this bottom fifth than the typical college student. In short, a little deeper analysis indicates that the decision of many people, especially young men, not to attend college could seem very rational.

Bryan Caplan reminds us that the college premium must be deconstructed to determine its value for a particular individual who plans to pursue a particular field of study.

———

Matthew Yglesias, “College graduates earn more, but that doesn’t prove college is worth it”, Vox, May 27, 2014.

Ben Casselman, “Is College Worth It? It Depends on Whether You Graduate”, FiveThirtyEight, May 27, 2014.

May 20, 2014

On ‘average’, it’s still worth going to college

by Grace

Earning a four-year college degree remains a worthwhile investment for the average student. Data from U.S. workers show that the benefits of college in terms of higher earnings far outweigh the costs of a degree, measured as tuition plus wages lost while attending school. The average college graduate paying annual tuition of about $20,000 can recoup the costs of schooling by age 40. After that, the difference between earnings continues such that the average college graduate earns over $800,000 more than the average high school graduate by retirement age.

Beware of basing personal decisions on the “average” case.

Not everyone is “average”.  Therefore, the ROI for a college degree must be based on personal circumstances, which can vary substantially.  For instance, some college graduates take on enormous debt that should be figured into the college premium.

The college premium is also highly dependent on field of study and on characteristics of the student.

Most reports that claim to measure the value of a college degree do not control for a vital factor — the student.  They fail to account for what Bryan Caplan calls the “ability bias“.  This bias favors personal traits like intelligence, work ethic, and conformity — traits typically valued by selective schools as well as by employers seeking candidates for high-income jobs.

Take one example.

On average, a hard-working computer science MIT graduate with a 130 IQ will bump up the average earnings for college graduates while a lackadaisical ethnic studies major with a 100 IQ who graduated from a directional state college will  lover them. But even if neither attended college, the MIT-wannabee would still probably out-earn the second individual.

So, when it is reported “that on average the value of college is high and not declining over time” …

College Earnings Premium by Graduation Decades

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Don’t forget to consider the other important factors, like college majors, costs, and individual ability, that lie hidden beneath the results.

———

Mary C. Daly and Leila Bengali, “Is It Still Worth Going to College?”, Federal Reserve Bank of San Francisco Economic Letter, May 5, 2014.

April 2, 2014

Don’t ignore student characteristics when measuring college ROI

by Grace

Most reports that claim to measure the value of a college degree do not control for a vital factor — the student.  They fail to account for what Bryan Caplan calls the “ability bias“.  This bias favors personal traits like intelligence, work ethic, and conformity — traits typically valued by selective schools as well as by employers seeking candidates for high-income jobs.

Psychology professor and author Christopher Chabris explains how the recent PayScale College ROI Report means very little unless ability bias is factored into the equation.

This means that the Return in this “ROI” depends on much more than the Investment. It also depends on who is doing the investing. In fact, it is far from trivial to figure out the true ROI of going to Harvard versus Wayland Baptist versus Nicholls State versus not attending college at all. To figure this out, you would have to control in the analysis for all the characteristics that make students at different colleges different from one another, and different from students who don’t go to college. Factors like cognitive ability, ambition, work habits, parental income and education, where the students went to high school, what grades they got, and many others are likely to be important. In fact, those other factors could be so important that they wind up explaining more of the variation in income between people than is explained by going to college—let alone which particular college people go to.

Even controlling for data we might be able to obtain, like the average SAT score of students who attend each college, or their average parental income, would not completely solve the problem, because there could be factors that we can’t measure that have an important effect. Only by randomly assigning students to different colleges (or to directly entering the workforce after high school) would we get a fair estimate of the true ROI (measured in money—which of course leaves aside all the other benefits one might get from college that don’t show up in your paychecks for the ensuing 20 years).

Look beyond the school name when predicting financial success.

While a degree from Harvard certainly has the signalling capacity and network connections that can boost earnings opportunities for its graduates, the characteristics of the students who enroll there figure prominently in determining future employment success.  Families should keep this in mind when they find their children shut out of admission to elite universities.  It’s not all about the school.

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March 4, 2014

Fundamental communication skills are more important than ‘new media’ skills for journalists

by Grace

Journalism instructors assign much more value to a degree in the discipline than do practicing journalists, according to a new Poynter study.

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Some 96 percent of journalism educators believe that a journalism degree is very important or extremely important when it comes to understanding the value of journalism. By contrast, 57 percent of media professionals believe that a journalism degree is key to understanding the value of their field.

Perhaps even more significant, more than 80 percent of educators say a journalism degree is extremely important when it comes to learning news gathering skills, compared to 25 percent of media professionals. One in five media professionals finds a degree in the discipline is not at all important or only slightly important in learning news gathering.

Should journalism school place more focus on teaching “new multimedia skills”?

Finberg, who authored the study, attributed the discrepancy in part to a kind of digital divide between journalism school curriculums and what’s expected of journalists in the field. Working journalists feel the demand for new multimedia skills that may or may not be part of traditional journalism coursework, he said, leading them to question the value of degrees in the discipline.

Or should they simply concentrate more on fundamental skills?

But given that modern journalism is a kind of moving target, experts said, programs can’t afford to lose sight of the fundamentals: good storytelling and strong writing and problem-solving skills.

“It is in no way possible for journalism schools to keep up with all the industry changes because journalism itself isn’t keeping with the technological changes,” said Sonny Albarado, president of the Society of Professional Journalists and projects editor at the ArkansasDemocrat-Gazette. “It’s important to be exposed to whatever the dominant or latest technology is, but that varies from place to place.”

Albarado said he prefers to hire reporters with journalism degrees, due to their training, but he wouldn’t exclude applicants with English degrees, for example.

Ultimately, he said, “I just want somebody who can write and think critically – and spell.”

The new media skills are relatively easy to acquire, but fundamental writing skills and critical thinking usually take years to learn.

It seems that a rigorous liberal arts education would be an excellent way to prepare for a journalism career.  Nate Silver thinks economics or math are good majors for journalists to meet the increasing importance of data-driven reporting.

Related: With the rise of robo-reporters, what is the outlook for jobs in journalism? (Cost of College)

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