Dear Commons Community,

The Chronicle of Higher Education with the assistance of the Huron Consulting Group has just issued a report entitled, The Value Equation: Measuring & Communicating the Return on Investment of a College Degree, that is based on a survey (N=801) of college leaders in December 2014. The survey population included vice presidents, deans, and executive directors at private, not-for-profit four-year, public four-year, and public two-year institutions.

Among the findings:

VALUE OF DEGREE. Overall, some 40 percent of college leaders believe their institutions provide an excellent value for the money parents and students spend. Officials at public colleges are more likely than those at private institutions to say that they provide the best value for the dollar.

STUDENT OUTCOMES. About a quarter of institutions surveyed make job preparation for their graduates a “very high” priority. Private four-year colleges were more likely to report job readiness as a high priority, largely because students and parents at those institutions demand a return on their hefty tuition investments.

SKILLS FOR SUCCESS. While parents and employers often want students to graduate from college with specific skills, those who run colleges believe their job is to provide a well-rounded education that gives graduates an appreciation for the value of lifelong learning.

STUDENT DEBT. Survey respondents had varied answers to what should constitute “minimal debt” for graduates. Some measured debt by the amount of time it should take to pay it off. About a third of respondents used a dollar amount, and among them, a majority said that a graduate’s debt should be under $25,000. (The average graduate of the Class of 2014 left with about $33,000 in debt, according to Edvisors, a web site about planning and paying for college.)

OUTCOMES DATA. By and large, college officials were opposed to publishing career and salary outcomes of their graduates either on their own or under government mandate. Overall, only a third of respondents said it was reasonable for the federal government to require outcomes data.

CAREER SERVICES. Close to half of the surveyed respondents reported a budget increase in career planning and placement services over the past five years. A notable 14 percent of institutions increased the budget for career services by more than 25 percent.

The Executive Summary is below.

Tony

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Executive Summary

As the global economy increasingly demands a knowledge-based workforce, the value of a college degree is growing exponentially. The so-called wage premium of a college degree now is higher than ever before: A typical bachelor’s-degree recipient earns 80 percent more than a high school graduate during a 40-year career, more than $500,000 over a lifetime. That wage premium has resulted in an enrollment surge in the past decade for American colleges and universities. The number of students on campuses has grown by more than one-third since the early 2000s, and institutions have responded with a bevy of new academic programs to serve this market hungry for new skills. The number of college majors tracked by the U.S. Department of Education has increased by some 20 percent just since 2000. Student demand also has allowed colleges to continue increasing their tuition prices. When the recession of 2008 hit, average tuition in the U.S. consumed some 40 percent of median earnings in the United States, up from less than a quarter of income eight years earlier. But as student debt surpassed more than $1 trillion in 2011, students and their parents started to question what they were getting in return for the high cost of a college degree. While the value of higher education remains undisputed, prospective students and their parents—armed with new tools that track the career and earnings outcomes of graduates—are beginning to cast doubt on the return on investment of certain majors and particular colleges.

In response, colleges are focusing more on the outcomes of their education and are putting in place programs to better prepare their undergraduates for the job market. In an extensive survey of college leaders, conducted by The Chronicle of Higher Education in the fall of 2014, six in 10 of them reported an increase in discussions about job preparation for their graduates in just the past three years. The survey, completed by some 800 vice presidents, deans, and directors at two-year and four year colleges, focused on their attitudes about the value of their degrees, strategies to measure the outcomes of their graduates, and what skills higher education should provide to students. Among the highlights from the survey:

VALUE OF DEGREE. Overall, some 40 percent of college leaders believe their institutions provide an excellent value for the money parents and students spend. Officials at public colleges are more likely than those at private institutions to say that they provide the best value for the dollar.

STUDENT OUTCOMES. About a quarter of institutions surveyed make job preparation for their graduates a “very high” priority. Private four-year colleges were more likely to report job readiness as a high priority, largely because students and parents at those institutions demand a return on their hefty tuition investments.

SKILLS FOR SUCCESS. While parents and employers often want students to graduate from college with specific skills, those who run colleges believe their job is to provide a well-rounded education that gives graduates an appreciation for the value of lifelong learning.

STUDENT DEBT. Survey respondents had varied answers to what should constitute “minimal debt” for graduates. Some measured debt by the amount of time it should take to pay it off. About a third of respondents used a dollar amount, and among them, a majority said that a graduate’s debt should be under $25,000. (The average graduate of the Class of 2014 left with about $33,000 in debt, according to Edvisors, a web site about planning and paying for college.)

OUTCOMES DATA. By and large, college officials were opposed to publishing career and salary outcomes of their graduates either on their own or under government mandate. Overall, only a third of respondents said it was reasonable for the federal government to require outcomes data.

CAREER SERVICES. Close to half of the surveyed respondents reported a budget increase in career planning and placement services over the past five years. A notable 14 percent of institutions increased the budget for career services by more than 25 percent.