Post-graduation salaries: Show me the money
As students (and their parents) increasingly consider value when picking a college, a new push to examine what they can expect to earn.
WHEN SHE WAS applying to college a few years ago, Donna Jo Cassidy heard plenty of friends at private colleges stressing out about their tuition bills. By graduation, some of them would have spent $200,000 or more, piling on part of it in student loans. So when it came time for Cassidy to look at schools, she wanted to know what the return would be on one of the biggest investments of her life.
With reservations about staying in her hometown of Lowell, Cassidy initially chose Keene State in New Hampshire. Before her sophomore year, however, she transferred to the University of Massachusetts Lowell. She chose it not only because it’s cheaper than most private institutions, but also because it publicized estimates of how much money she could expect to make when she graduated.
How much? More than many of those private-college friends.
In its “Is College Worth It?” ad campaign, UMass Lowell uses rankings from PayScale, a private compensation-survey firm, to show its graduates earn starting salaries of $50,000, on average, and $95,100 by the middle of their careers (according to figures self-reported by graduates). That’s as much as students who go to Boston College, and more than graduates from Bentley University, Boston University, Merrimack College, Wentworth Institute of Technology, Brandeis University, and Northeastern University — all schools with much higher price tags.
Not surprisingly, this information “is readily available all over campus,” Cassidy says. “It’s on the Facebook page. It’s on posters on the walls. The statistics are right there, and they’re available to everybody.”
It’s not just UMass Lowell that’s beginning to draw attention to earnings. States are also getting in on the act. Arkansas and Virginia now disclose it for all of their public and private colleges, and other states are doing it for all of their public ones. That means in some places prospective students can compare the financial payoff of their educations among various schools, as well as by the even more specific categories of major and degree. But don’t expect to see that soon in Massachusetts.
The state will eventually provide salary information for all graduates of its 29 public universities and colleges using unemployment data. Yet that will tell only part of the story. Roughly half of students in Massachusetts go to private institutions, which have been less willing to report the financial success of their graduates.
Some of those private colleges “are scared out of their minds about being held to concrete results,” says Mark Schneider, vice president of the American Institutes for Research and a former commissioner of the National Center for Education Statistics. Schneider heads up the College Measures project, which has worked with Arkansas, Colorado, Tennessee, Texas, Virginia, Minnesota, and Florida to calculate the salaries of each state’s public and, in some cases, private college and university graduates. (Washington state also makes that information publicly available.)
This new focus on performance measures has been propelled by parents and policy makers who want to know the true value of an education. Tuitions have more than doubled in inflation-adjusted dollars since 1987 at four-year private, nonprofit institutions, according to the College Board, and nearly tripled at public four-year universities. That’s a bigger increase than in the health care industry.
In response, the White House has proposed rating institutions based on their students’ graduation rates, average debt, and other measures. Critics inside and outside of academia propose to use data to hold universities and colleges accountable for their promise that a degree will mean more lifetime earnings.
THERE ARE SHORTCOMINGS with the concept of comparing salaries across programs and institutions. The College Measures project equally compares colleges that admit different kinds of students with varying levels of preparation, for example. As will be the case for public universities in Massachusetts, it also relies for salary information on the records of the participating states’ unemployment insurance systems. That means alumni are currently excluded if they move away, go to graduate school, work for the government, or join the military. An analysis by the University of Virginia found that 22 percent of its degree recipients continued on to graduate school and 43 percent left the state — there was likely some overlap in the two categories — and that none of them were being counted.
No one suggests that salary should be the only measure used to pick a college (for more factors to consider, see “Smarten Up”). But the results have been eye-opening. Students who get associate’s degrees in technology fields from community colleges make a higher median salary just after graduation than the median across all bachelor’s degree programs — from $1,300 a year more in Tennessee to $11,000 a year more in Texas. And liberal arts graduates in Virginia, including fine arts and philosophy majors, earn less than $24,000 a year on average.
Many graduates of public universities, meanwhile, take home more than their counterparts at private ones — sometimes much more — even in the same disciplines. Virginians who went to the public University of Virginia and Virginia Tech, for instance, make far more than those who attended more than a dozen considerably pricier private colleges in that state.
That’s something of a foreign idea in these parts. “People in Massachusetts tend to think that anything private is better than anything public, and that’s just the furthest thing from the truth,” says Richard Freeland, the former president of private Northeastern University who now serves as Massachusetts commissioner of public higher education.
No surprise, then, that public universities tend to be more enthusiastic about sharing such information than their private counterparts. Freeland has pushed for a new series of metrics for this state’s public universities that will include reporting employment rates of graduates by major (though these will not necessarily specify whether they are working in the fields for which they got degrees) and, eventually, their average earnings.
And that may produce surprises. “The real threat to the establishment is the secret that students coming out of some of these regional public campuses do as well as students at the flagships and the privates,” Schneider says.
Colleges and universities have long advanced the idea that their degrees come with a premium in earnings. But exposing exactly how much — or how little — promises to bring competitive pressure to bear by steering students away from programs with lower market value and colleges whose graduates fare poorly. “A lot of second- and third-tier private institutions are going to have a lot of trouble surviving once people look at this,” says Marty Meehan, the former congressman who now is chancellor at UMass Lowell.
Of course, all of this is based on a contentious assumption, says Richard Doherty, president of the Association of Independent Colleges and Universities in Massachusetts: that the principal objective of higher education is to make as much money as possible. “It’s fundamentally wrong and misleading to try to reduce the value of a degree to the salary of a first-year graduate,” he says.
Yes, Doherty says — a degree improves a student’s lot in life. That’s why, for its annual dinner, his association made a video of current and former CEOs and presidents of Massachusetts-based businesses, including BJ’s Wholesale Club, Dancing Deer Baking Co., and the Drew Co., extolling the liberal arts educations they received at private colleges and universities in Massachusetts.
“If those people are recognizing the value of that kind of education,” says Doherty, “it’s really doing students a disservice to give them a quantifiable comparative number that might sway them from pursuing their passion.”
Freeland agrees. “It’s kind of silly for people to say it’s beneath us to even think about” how much graduates will make, he says, but it should not be the only way to gauge success.
Students, however, seem to want more tangible evidence of what they’re getting for their money. A record nearly 90 percent of freshmen in an annual national survey by the University of California, Los Angeles said the most important reason for going to college was to get a better job.
Even boosters of the liberal arts have been drawn into this debate. After years of decrying the idea that a college education could be reduced to its financial return, the Association of American Colleges and Universities, which represents liberal arts schools, came out with its own salary report in January. Using Census Bureau data, it showed that while humanities and social science majors may earn an average of $5,000 a year less than professionals and pre-professionals right out of college, they make an average of $2,000 more by the peak of their careers.
But the report concedes that humanities and social science majors make less over the course of their lives than engineers and people with degrees in the physical and natural sciences and math and that their unemployment rate is higher at every age. Engineers make average peak earnings of $97,751, and workers with degrees in the physical and natural sciences and math, $86,550; by comparison, humanities majors make $66,185.
This raises another issue: There are benefits to some jobs beyond financial. After all, humanities and social science majors have disproportionately significant roles in professions such as social work and counseling. There are clearly some jobs “that are very low-paying but incredibly important to society,” Doherty says.
Yet momentum to provide salary data is building. The Student Right to Know Before You Go Act, introduced in the US Senate by Democrats Mark Warner of Virginia and Ron Wyden of Oregon and Republican Marco Rubio of Florida, would require all universities and colleges to disclose such information. “Students are entitled to know the value of their education before they go out and borrow tens of thousands of dollars from the banks and from the government,” Wyden says. “Right now, consumers don’t have this information.”
At UMass Lowell — where in spite of tougher admission requirements, enrollment is up by 25 percent since 2009 — Cassidy has become such a booster that she now gives tours to prospective applicants, many with money on their minds. “It’s a question they ask often,” she says. How much am I going to pay? How much am I going to make? What is the return on my investment?
Like her, these students and their families want to know because they’re straining to afford an education. Cassidy’s brother is at UMass Lowell, too, and their parents are trying to avoid going into debt by using their savings to help put both children through school. Right now, in-state tuition and fees are just over $12,000, not including room and board. And even at a public university, Cassidy says, “that’s real money.”
Graduates of Harvard University: $119,000
University of Massachusetts Lowell: $95,100
Boston University: $90,700
Wellesley College: $80,000
Online resources to help make a more well-informed college decision.
Much of what students and their families know about college comes from popular commercial rankings, like those from US News & World Report, which are based largely on the quality of entering students — their entrance-test scores, grade point averages, and other measures. But what prospective students really want to know these days is what they’ll get out of their education, according to a survey last year by Hart Research Associates. That means not only what they’re likely to earn, but how much they’ll really pay, and what percentage of them will graduate, in how many semesters, and with how much debt.
There are ways to find this out. In some cases, colleges and universities themselves are required by law to provide it. They must disclose their net price, or the average amount that students actually pay after subtracting discounts and government and institutional financial aid. But while each school must post a net-price calculator on its website, these are often hard to find. Here’s some help.
The College Board — the organization behind the SAT and AP tests — offers its Net Price Calculator at studentnpc.collegeboard.org. The tool can estimate how much, based on a family’s income and assets, students from that family will pay at any participating school. So does the US Department of Education, on a little-known website called College Navigator (nces.ed.gov/collegenavigator). That site also tracks graduation rates, tuition, average debt, racial and ethnic diversity, and campus crime, among other measures.
Another Education Department website, the College Scorecard (collegecost.ed.gov/scorecard), compares college costs, debt, and graduation rates against the national average. It also is supposed to list the average earnings of undergraduates, but doesn’t yet. A note of caution: The department’s dependence on colleges and universities themselves to provide information makes some of these government websites vulnerable to error and, worse, misrepresentation. Several top colleges and universities in the last few years have admitted falsifying information given to the US Department of Education, as well as to their own accrediting agencies and private ratings agencies.
A US Department of Labor-sponsored website, mynextmove.org, lists the educational requirements, job outlook, and current average pay for various careers. The American Institutes for Research College Measures project (collegemeasures.org) compares the incomes of graduates from many colleges and universities based on major, degree, and institution in Arkansas, Colorado, Tennessee, Texas, Florida, Minnesota, and Virginia; Washington state also makes this information available. And the compensation survey firm PayScale (payscale.com) ranks colleges and universities based on average starting and mid-career salaries of all graduates.
Jon Marcus is a Boston-based writer who covers higher education, including as US correspondent for the Times Higher Education magazine in the United Kingdom. Send comments to email@example.com.