At a time of great uncertainty for higher education, this much is clear: Our challenges won’t go away until we face the big, hairy questions about the value of college degrees.
People have been telling us that they have doubts about the high costs of college, the time it takes to earn a degree, and whether it all pays off when they’re looking for better jobs.
Over the past decades, the country has made significant progress in expanding access to college, creating more opportunities for veterans, women, Black students and other students of color, people from low-income households, and others.
Leaders have also recognized the need for a greater focus on supporting students once they start programs so that their efforts result in earning degrees and other credentials.
But to meet the demands of today’s economy, education and training after high school must deliver greater value. This will take a real redesign of higher education to meaningfully address concerns and create a system that works better for everyone.
Video: Jamie Merisotis talks about improving the value of college degrees.
Calculating Return on Investment
Studies consistently show the economic return on college degrees. A report published in the American Educational Research Journal found that on average, a bachelor’s degree yields a return on investment of about 10 percent annually over a person’s lifetime—better than the stock market, argues Liang Zhang, professor of higher education at NYU and one of the study’s authors.
There are other benefits: People with college degrees report being happier, tend to be more involved in their communities, and actually live longer.
But to reap the rewards, learning after high school also requires a substantial upfront investment—in time, money, and effort. For many Americans, that’s enough to tip the scales.
Better Information Needed
The value of credentials also depends on the majors or the training programs that students choose. The seed of doubt grows when learning doesn’t translate to real-world work—or when not everyone sees their credentials pay off.
In a survey last year by the think tank Third Way, only half of registered voters said they believe students have all the information they need to decide which college, university, or vocational school will provide the best return on investment.
“Voters still see the value of a college education and its connection to a secure financial future but recognize that changes are needed to maintain that positive ROI for future generations,” the Third Way report said.
Measurements of Value
The return-on-investment calculation can mean something different to everybody: It could be a low-cost, short-term credential with a high financial return. It could be a degree that unlocks doors to specialized careers. Or, for some, a rich return on investment could mean learning the skills they need to change the world for good.
“For families, when I talk to them—yes, it’s about getting the degree, but it’s also about economic independence and economic mobility,” California State University Chancellor Mildred García said in a recent conversation with the Gates Foundation about college value. “In other words, we’re going to make sure that that’s no longer an issue so that you can use your talents to help your community, to help your city, to help your state.”
To maximize the return, we can and must improve on both sides of the equation.
When the investment is widely seen as far too high—too expensive, too time-consuming, too complicated and inflexible—it won’t matter how good the returns are. People are demanding affordable pathways that can fit busy lives and support the needs of all students to be successful.
The Expectations of Today’s Students
The National Conference of State Legislatures’ Task Force on Higher Education released a report last fall detailing recommendations for improving higher ed’s value.
The bipartisan task force recommends, for example, that colleges make it easier for students to transfer between institutions and receive credit for what they already know. It also calls for stronger alignment between education and the workforce, to equip students with in-demand skills that will help them adapt in a rapidly changing economy.
“This task force believes that higher education must adapt to meet the reality of today’s students and the new expectations that the public has of higher education,” the report noted.
Those expectations are growing—and they may still change, as Gen Z and Gen Alpha bring their own perspectives on what they value.
Students and families have reasonable questions about the economic value of education, and we should rethink our conception of what success looks like: It’s not enough to point to increased enrollment or even the improved number of adults with credentials, which has risen from 38 percent to nearly 55 percent since 2008.
Credentials of Value
Along with emphasizing education’s wider social benefits, it’s time we focused on credentials of value. Based on what we can measure now, value can be quantified through wages. It’s reasonable to expect degrees, certificates, and industry certifications should yield earnings at least 15 percent higher than those of a high school diploma alone.
We also need to add new measurements of value to assess how credentials can lead to better jobs and life outcomes. By defining more clearly what we mean by high-quality credentials, we can work toward getting the most value possible from our vital investments in education.
This is one of those cases where we tend to improve the things we measure. Americans are demanding improvement in higher education. They’re right, and this will help us get there.