Getting a degree pays off, but graduates don’t benefit equally, report finds

by Joseph K. Clark

Dive Brief:

  • The Postsecondary Value Commission, supported by the Bill & Melinda Gates Foundation, created a framework to measure how much attending college benefits students and identify equity gaps.
  • At roughly three-quarters of nonprofit public and private colleges, students have median earnings a decade after enrolling that cover their total cost of attendance. They are more significant than high school graduates in their state, its analysis found. Half of the for-profit colleges did not.
  • The Commission also analyzed data within the University of Texas System, which revealed deep racial, gender, and socioeconomic disparities in students’ value of their education.

Dive Insight:

At nine in 10 public four-year institutions, median student earnings exceeded those of high school graduates. According to the Commission’s analysis, they covered the net price of college ten years after entry. That’s compared to 77% of private nonprofit four-year schools and 69% of for-profit four-year.

Students who attended two-year schools tended to fare slightly worse. Eight in 10 public two-year institutions had median student earnings that met those requirements, followed by 58% of private nonprofit two-years and 36% of for-profit two-years. To meet its minimum threshold, the Postsecondary Value Commission requires a school to have median student earnings ten years after entry exceed those of high school graduates in the same state and cover the college’s net price. Natalie Schwartz/Higher Ed Dive, data from Postsecondary Value Commission. The Commission also looked at data from the UT System to study differences in earnings at the program level. Its analysis shows that racial, socioeconomic, and gender inequities are rampant, especially within higher-paying fields.

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For instance, most UT System graduates who completed their computer, statistics, and mathematics degrees recouped their investment in higher education a decade after enrolling. But White graduates had median earnings around $28,000 and $43,000 more than their Black and Latinx peers, respectively, 15 years after completion. In the report, Latinx includes students who self-identified as Hispanic. Gender disparities were also stark. Men who graduated in those fields had median earnings of $37,000 higher than women 15 years after getting their diplomas. Similar gaps were found between men and women graduates of architecture and engineering.

Differences also arose in the earnings between those who completed a credential and those who didn’t. Five years after graduating, median Latinx and Black students saw an 81% and 59% earnings premium compared to their peers within the same group who didn’t finish college. Meanwhile, White students saw a smaller earnings premium of 45%, which the report’s authors say is likely because White high school graduates tend to have higher wages than other groups. “These findings leave no doubt that by allowing these inequities to persist, we are hurting students of color, students from low-income backgrounds, women students, and our workforce, our economy, and our society as a whole,” said Mamie Voight, interim president of the Institute for Higher Education Policy, which helped produce the report, during a video call with reporters.

The report makes several recommendations to institutional leaders and federal and state policymakers to close equity gaps. It advises that colleges eliminate admissions requirements that could disadvantage certain students, including policies that favor legacy status or consider standardized test scores. The report notes that schools and policymakers should also work to improve credit recognition and transfer policies. Meanwhile, it says federal lawmakers should offer additional funding to help schools increase their enrollment of racial minority and low-income students.

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