Comparing college costs to the amount a student expects to earn after graduation
A MARTÍNEZ, HOST:
All right. It's a big day for many high school seniors. If they had applied to a bunch of colleges and were fortunate to be accepted at a number of them, today is the deadline for picking which one they'll be attending this fall. It's a key part of that decision that is going to be the cost of tuition. The Department of Education is out with new data that helps students compare the cost of attending school with the amount you can expect to earn after you graduate.
But how much should this kind of data factor into picking a college? Professor Jeff Strohl is director of research at the Georgetown University Center on Education and the Workforce. Professor, a lot of data that weighs the cost of college against earnings after graduation - so how can students use that data to decide which college to go to?
JEFF STROHL: Well, the data that we have out there lets us look at cost versus earnings, often known as return on investment. And students can take a look both at institutions and programs. And I think they really need to take a look at the program data to help them compare. So if they're in a region and there's a couple of schools, I think it's very helpful for them to look and weigh out the cost and also in the national market so that they can look at one institution in New York versus California on their earnings versus costs to let them know how deeply in debt they'll go and what kind of earnings they potentially can make.
MARTÍNEZ: And there's no way to account for all the variables - right? - that go in between all that.
STROHL: Yeah, that's very true. I mean, you have to get a sense of when they're looking at the national market, understanding that working in New York eventually, if that's one of their targets, is going to be much more expensive than working in Montana. So they need to really think about how that adjusts on the earnings. But most importantly, what do they want to do? So don't really look at the institutional reputation, but take a look at the program outcome. What kind of work do they want to do? What's their major going to be? And I think that's much more important than the institutional prestige.
MARTÍNEZ: Then, Professor, if students know - if they absolutely know they're going to be saddled with debt when they graduate, is a college education still worth it?
STROHL: Oh, absolutely. I mean, if you look at the data, median debt right now is around $27,000. All this news about $300,000 in debt is a really rarified part of the market. So if your debt load is around 27,000, we look to people being able to pay that off in about a 10-year period of time as a good investment because the rest of your career is basically profit on the investment you've made in yourself through your education. And on average, college education pays off - of course, not always.
STROHL: There are many - there are programs that people need to look at that don't break poverty. I mean some cosmetology, for instance. So some of the two-year and one-year certificates don't pay off. So people need to be careful. This is for sure.
MARTÍNEZ: Now, a school's reputation and their naming sometimes factors into a lot of decisions. But you also say it's important to look behind the curtain. So what do you mean by that?
STROHL: Well, when we look at the data, let's say compare Harvard versus Howard. And so if you want to get the reputation from Harvard, you're going to go to the school. But if you pick a major that doesn't pay very well and the other institution has costs that's a 10th of Harvard, and you get the same return, the same earnings, why would you go to Harvard? And so these are the questions that people need to ask.
So the reputation - Mom or Dad went to the school, alumni or legacy status - can be important to you. But this, when we start to get into education as a consumption good rather than a good that pays you back - right? - is that idea of return on investment. You're investing in yourself. So opening it up and understanding how the major plays into what you're going to earn becomes very important when you think about your lifelong career.
MARTÍNEZ: And Professor, about 30 seconds here - it's ultimately the student that decides because they're going to have to live with the consequences. They got to pick the school that's right for them. But parents - how big of a role should parents have in this decision?
STROHL: I think parents need to really help students understand the information. There's too much information there. So trying to navigate your way through this - all of us need guides. And parents understand the data and the breadth of the data and the impact of the decisions perhaps better than the youth.
MARTÍNEZ: Professor Jeff Strohl is the director of research at the Georgetown University Center on Education and the Workforce. Professor, thanks.
STROHL: Thank you.
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