SEPT. 13, 2015
Kevin Carey, nytimes.com
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Colleges give prospective students very little information about how much
money they can expect to earn in the job market. In part that’s because
colleges may not want people to know, and in part it’s because such
information is difficult and expensive to gather. Colleges are good at tracking
down rich alumni to hit up for donations, but people who make little or no
money are harder and less lucrative to find.
On Saturday, the federal government solved that problem by releasing a
huge set of new data detailing the earnings of people who attended nearly
every college and university in America. Although it abandoned efforts to rate
the quality of colleges, the federal government matched data from the federal
student financial aid system to federal tax returns. The Department of
Education was thus able to calculate how much money people who enrolled in
individual colleges in 2001 and 2002 were earning 10 years later.
On the surface, the trends aren’t surprising — students who enroll in
wealthy, elite colleges earn more than those who do not. But the deeper that
you delve into the data, the more clear it becomes how perilous the higher
education market can be for students making expensive, important choices
that don’t always pay off.
The national universities producing the top earners are no surprise:
Harvard, M.I.T., Stanford and others that routinely top the annual U.S. News
and World Report college rankings. The most troubling numbers show up far
beneath the upper echelons of higher education. Elite institutions prop up the
overall average earnings of college graduates nationwide. Although earnings of
college graduates continue to outpace those of non-collegians by a significant
margin, at some institutions, the earnings of students 10 years after
enrollment are bleak.
The Department of Education calculated the percentage of students at
each college who earned more than $25,000 per year, which is about what
high school graduates earn. At hundreds of colleges, less than half of students
met this threshold 10 years after enrolling. The list includes a raft of barber
academies, cosmetology schools and for-profit colleges that often leave
students with few job prospects and mountains of debt.
But some more well-known institutions weren’t far behind. At Bennington
College in Vermont, over 48 percent of former students were earning less than
$25,000 per year. A quarter were earning less than $10,600 per year. At Bard
College in Annandale-on-Hudson, the median annual earnings were only
$35,700. Results at the University of New Mexico were almost exactly the
same.
The data reveals how much money students are borrowing in exchange for
earnings after graduation. While U.C.L.A. and Penn State are both prestigious
public research universities, recent U.C.L.A. grads leave with about 30 percent
less debt, even as their predecessors are earning about 30 percent more money
than counterparts at Penn State. Harvard students borrow barely a quarter of
what Brandeis students take on, and earn nearly twice as much.
The return is unequal in other ways. There is an earnings gender gap at
every top university. The size of the difference varies a great deal. At Duke, for
example, women earned $93,100 per year on average, compared with
$123,000 for men, a difference of $29,900. At Princeton, men earned more
and women earned less, for a difference of $47,700. Women who enrolled at
Cornell earned more than women who enrolled at Yale.
Defining higher education in purely economic terms risks exacerbating
what some have described as the corporatization of the modern university.
People get a lot more out of college than earnings potential. They learn to be
better citizens and better human beings. The world needs dancers and poets
along with the future investment bankers and tech entrepreneurs streaming
out of elite schools.
The problem is that the dancers and poets are paying the same, ever-rising
tuition, even though the necessary cost of running a good poetry
program is probably not much more than it was in earlier times when college
tuition was much less expensive than it is today. And you can’t pay your
student loans back with citizenship — only dollars will do.
Colleges can ameliorate this problem by providing need-based financial
aid to low-income students, reducing their debt burden and likelihood of loan
default. The new data indicates that some colleges are more successful with
this strategy than others.
At the University of Cincinnati, a third of low-income students (from
households earning less than $30,000 per year) had failed to pay back any of
their student loans five years after graduation. At the University of Alabama,
the number was roughly a quarter; at Wayne State University in Detroit, over
40 percent. At the for-profit University of Phoenix, nearly two-thirds of poor
students are in these dire straits.
It will take time for the raft of new federal earnings data to seep into the
complex reputational ecosystem that continues to govern the higher education
market. But this new bottom line will eventually become a permanent aspect
of how colleges of all kinds are understood.
Kevin Carey directs the education policy program at New
America. You can follow him on Twitter at @kevincarey1.
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