Around the Institute

4 Reasons to Reconsider the Cost of College

April 29, 2015

For college-bound high school seniors, May 1 is Decision Day. A number of factors will influence students’ decisions on where to enroll, but up until now, very few students and families incorporate information on student outcomes—employment, earnings, and debt load upon graduation—into their decision-making process. The Aspen Institute College Excellence Program has concluded in a new study that, at a time when tuition costs and student debt are soaring, there is a critical need to rethink how we evaluate the links between higher education and the workforce.

From College to Jobs: Making Sense of Labor Market Returns to Higher Education summarizes key findings from recent research and features eight brief papers from leading education and workforce experts from around the country. The report cites important trends, including some that run counter to popular notions.

“There are a lot of benefits to be derived from a college degree, but research and policy are increasingly focused on one important outcome: whether students get a good job after graduating. Making sure everyone gets the most out of this research will require not only more strong studies like those reflected in the paper the Aspen Institute releases today, but the engagement of those who stand to benefit most from understanding the link between different college offerings and workplace outcomes,” said Josh Wyner, executive director of the College Excellence Program.

Among the key findings:

  • Over their entire careers, college graduates earn on average one million dollars more than high school graduates, but there is significant variation. Anthony P. Carnevale and Andrew R. Hanson of Georgetown University reported that 30 percent of people with associate’s degrees are earning more than the median income of workers with bachelor’s degrees, so that, “a teacher with a bachelor’s degree from Harvard still typically makes less than an engineer with an associate’s degree from a community college.” 
  • Earnings outcomes for some higher education programs suggest limited value (without further education). Of those enrolled in 4,400 career programs tied to jobs, 15 percent of students did not earn enough to cover their student loans, reported Ben Miller of New America. Meanwhile, the American Institute of Research’s Mark Schneider found many associate’s of arts degrees have limited free-standing labor market value.
  • While finishing college and getting a degree is important, some dropouts may still have an edge in the labor market. Working with data from California’s community colleges, WestEd’s Kathy Booth and the University of Michigan’s Peter Bahr found that students who failed to finish certain career and technical education programs, particularly working adults seeking to update their skills, often earn as much as students who complete the program.
  • The ultimate labor market value of certain degrees may be underestimated if not considered as part of a planned course of study that will include an advanced degree. A bachelor’s degree in history, for example, may seem less valuable than a bachelor’s degree in nursing, but not if the history degree is one stop along a path that culminates in a master’s of business degree.


labor maket outcomes

Note: This diagram illustrates the possible postsecondary educational trajectories associated with five careers with relatively strong labor market outcomes, demonstrating the variable initial and additional labor market value of individual credentials within each educational pathway. Click the image to open a larger version.

Despite these findings, there is still more that needs to be learned. The Institute’s report also concludes that, to really understand the labor market value of postsecondary education, particularly when many students today attend multiple institutions and obtain more than one degree before seeking employment, researchers need a way to track people as they move through college and into the job market.

“While the studies in this report offer valuable insights, they also reveal that we still really don’t have adequate data to fully measure the return on this investment,” Wyner added. “Higher education in America has several purposes, but a central one is to help us remain globally competitive and to expand social mobility. Without much better feedback from the labor market, we cannot fully understand if it is serving these critical purposes.”