Most people go to college to improve their financial prospects. But there are other benefits to attending an institution of higher education. But with the average cost of a four-year degree climbing into the six figures, it can be difficult to know if that money is well spent, even at public universities.
A new analysis from HEA Group, a research and consulting firm focused on college access and success, may help answer questions for students and their families. This study compares the average earnings of college students 10 years after starting college to a basic income benchmark.
The analysis found that the majority of colleges exceed minimum economic standards for graduates, including having average annual earnings higher than the average annual earnings of non-secondary high school graduates ($32,000, per federal Scorecard data).
Still, more than 1,000 schools fell short of this standard, many of them for-profit colleges that focused on short-term credentials rather than traditional four-year degrees.
Michael Itzkowitz, founder and president of HEA Group, said ensuring that college-bound students are earning a “reasonable” income can help people decide whether to cross some colleges off their lists. For example, someone deciding between similar colleges might look at which institutions produce students with much higher incomes.
Income isn't necessarily the only criterion to consider when comparing schools, but “it's a very good starting point,” Itzkowitz said.
The report used college transcript data from the Department of Education to evaluate the earnings of nearly 5 million former students who attended approximately 3,900 postsecondary institutions 10 years after first enrolling. (The analysis includes data on people who did not complete their degrees.) The report includes public colleges, private nonprofits, and for-profit schools. Schools may also offer non-degree certificates, associate degrees, and bachelor's degrees.
The analysis found that schools that earn less than their non-college peers are typically for-profit institutions and schools that offer non-degree certificates that can be completed in 18 months. The list also includes some public and public institutions. Private non-profit school. At 71% of for-profit schools, the majority of students earn less than high school graduates 10 years after enrollment, compared with 14% of public institutions and 9% of private, nonprofit schools, Mr. Itzkowitz said.
“College is actually worth it,” Itzkowitz said. But paying for it can be “quite risky,” depending on the type of school you attend or the credentials you want.
(Another report found that students who attended for-profit colleges tend to experience more financial risks than students who attended similarly selective public colleges. These risks include taking on more debt for higher education and defaulting on student loans. You are more likely to do it, and your chances of getting a job are lower.)
Jason Altmaier, president and CEO of Career Education Colleges and Universities, a trade organization that represents for-profit career colleges, said it doesn't make sense to group schools that primarily offer short-term certificate programs with those that offer four-year degrees. . For example, people who want to work in certain professions, such as cosmetology, typically cannot work in those fields without obtaining certification, he said.
Ms. Altmire also said income data from for-profit accredited schools may be skewed by “gender bias.” That's because the program has a higher percentage of women than men. Because women are more likely to work part-time while supporting their families, they have lower academic achievement in schools. Median income was reported.
The HEA report also compared the college's performance to other benchmarks, such as the federal poverty line (an individual's annual income of $15,000), which is used to determine eligibility for government programs such as subsidized health insurance and Medicaid. Although the “vast majority” of colleges had incomes above this threshold, 18 colleges, most of them for-profit schools offering non-degree certificate programs in cosmetology or hairstyling, had median student incomes below this threshold, the report said. .
Major is also important. That's because majors in science, technology, engineering, and nursing fields typically earn much higher salaries than those majoring in the arts or humanities. (Last year, the HEA published a separate analysis of the highest-paying college majors.)
When comparing earnings after college, students and families shouldn't look at the data in a vacuum, said Kristina Dooley, a certified education planner in Hudson, Ohio. Many schools where former students are top earners have programs that focus on health sciences, technology, or business, but that may not be what you want to study.
“Use that as a piece of information,” Mr. Dooley said.
She said students shouldn't rule out college just because it's not at the top of the income list. But ask questions such as whether the career services office can help you find a well-paying job by setting up an internship and connecting with alumni.
Graduate school income may be more important for students and families who need to take out college loans, said Amy S. Jasper, an independent education consultant in Richmond, Virginia. “How much debt do they want to take on?” She said. “That is something to consider.”
But she said the benefits of college aren't just financial. “I like to think that choosing a good school is also about becoming a better person and contributing to the world,” she said.
Here are some questions and answers about college tuition.
Which college has the highest median income?
Major names appear heavily at the top of the HEA analysis, as do most Ivy League schools, Stanford, and the Massachusetts Institute of Technology. Their students earned an average income of at least $90,000 10 years after enrollment. (A few for-profit schools that focus on careers like nursing and digital fabrication are also present here.) But what are the highest-grossing colleges on the list? Samuel Merritt University, a nursing and health sciences school in Oakland, California, and the University of Health Sciences and Pharmacy in St. Louis each earn more than $129,000. You can view the data on the HEA website.
How much is college tuition?
The average estimated “sticker” price (advertised costs for tuition, fees, housing, meals, books and supplies, transportation, and personal items) for colleges ranges from about $19,000 per year for a two-year community college to about $28,000 for a four-year community college. It varies. A student at an in-state four-year public college earns nearly $58,000 at a private four-year college, according to 2022-23 data from the College Board. However, some students may be able to pay much less due to financial aid.
Do some college programs require me to meet the income criteria?
Federal “gainful employment” regulations aimed at making job programs more accountable are scheduled to take effect in July. The new rules, which primarily affect for-profit schools but also apply to certificate programs at all types of colleges, require schools to ensure that at least half of their graduates earn more than the typical high school graduate in their state and that graduates will have lower student loan repayment. Colleges that miss either criterion must notify students that the school may not receive federal financial aid. Schools that fail to pass the same standards twice in three years become ineligible for federal aid programs.