Georgetown study measures colleges' return on investment
ELISSA NADWORNY, HOST:
Is going to college worth it? That's the question researchers from Georgetown University's Center on Education and the Workforce are trying to answer. To do so, they've crunched new federal data on graduation rates, student debt and how much graduates earn in order to rank 4,500 colleges and universities.
Martin Van Der Werf is one of those Georgetown researchers, and he joins me now. Welcome, Martin.
MARTIN VAN DER WERF: Thank you for having me.
NADWORNY: So is this a new way of thinking about where to go to college? I know for a long time, these decisions were really emotional or, you know, made by kind of where your neighbor went. What's new about this thinking?
VAN DER WERF: Well, I think the idea of where to go to college still is pretty emotional.
VAN DER WERF: The key about the scorecard data, it's the first time that we've had this kind of data about how much people make 10 years and 40 years after they enroll in college, data on the kinds of loan debt that the average student might have, data on graduation rates, and now it's freely available to the public.
You know, you think about the major decisions that we make in our lives, and college is right up there with, say, buying a car and buying a house. You know, when you buy a house, you look at it, you tour it, you look at comps, you get a pretty good idea of what you're getting. But when it comes to college, you sort of don't know what you're getting. It's kind of a black box. And this really is the first time that you've been able to look at what might happen as a result of attending a specific institution and majoring in a specific major.
NADWORNY: Let's dive into that money question, literally. I mean, do college grads earn more? What are you seeing kind of across things that you study across institutions?
VAN DER WERF: In general, going to college pays off. But it only pays off if you finish. It doesn't pay off if you don't. And it can pay off at different levels. It isn't just the bachelor's degree, for example. If you earn an associate's degree, it does pay off in the marketplace.
What doesn't pay off is people who go and then take out loans and then don't finish. And then they're even further behind the eight ball than if they had never gone at all.
NADWORNY: Is there a category or a kind of college or university where just across the board you see a really high return on investment?
VAN DER WERF: Well, we happened to find out that colleges that focus very narrowly on specialized medical applications like pharmacy schools have very high payoffs. We also find in general that colleges that have high STEM populations also tend to have very high payoffs.
NADWORNY: Conversely, do you see a kind of college or university where the return on investment is consistently low?
VAN DER WERF: For-profit institutions that might be focusing on kind of the hot topic of the day - for example, designing games or other occupations related to IT. But what we find is that a lot of the credentials that they were offering, by the time a student finishes, the market may have already overtaken it. They're out of date and they're no longer needed or required by employers. So you need to be very, very careful about institutions like that.
NADWORNY: So there is so much info here for families. It can be really confusing. Is there a better way to be helping students and families make these decisions?
VAN DER WERF: I think that colleges really need to engage with families in this conversation and talk to them about what the potential outcomes are going to be. I also think that in this country, we need a more comprehensive system of counseling that really talks about options. You have different occupations, different majors, different ways of going about pursuing the career that people imagine for themselves. And we just don't have a real good system of that right now. Counselors might really be able to help us to understand what our options are better than we can understand ourselves.
NADWORNY: That's Martin Van Der Werf, from Georgetown University. Thank you so much.
VAN DER WERF: Thanks for your interest in our work.
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