Thursday, December 14, 2017
Opinion

Column: Colleges that make students poorer (w/video)

Every year, the salary comparison website Payscale.com gathers up its massive trove of user-generated data and ranks America's colleges and universities based on which schools make their students richest. Or, to be a little more technical about it, the site calculates each institution's total return on investment, once you take the cost of attendance into account.

And every year, the results are roughly the same. Turns out, once you take financial aid into account, going to a prestigious liberal arts college or research university is a great use of four years. So is going to a reasonably priced state school with a great tech or engineering program — or, for that matter, an extremely expensive private university with a great tech or engineering program.

All of which is pretty intuitive. Ivy League universities tend to select kids who will have higher potential earning power in the first place, because they're bright and have supportive families. Fancy employers such as investment banks and tech giants also love to recruit from them. Tech and engineering, meanwhile, tend to be the highest paid undergraduate majors. And because this ranking doesn't include graduates who earn advanced degrees later on — so no doctors, lawyers, or MBAs — the advantage is naturally going to lie with the tech schools.

So as a policy nerd, to me the most interesting part of Payscale's rankings isn't the top of the list: It's the bottom. The site finds almost two dozen schools where the average graduate — not dropouts, mind you, but students who finish their degree — will probably lose money on their educations, because their earning power won't increase enough to justify the cost of tuition.

To be blunt, these schools make students poorer. And we're talking about traditional colleges, not nefarious for-profits. Below are the bottom 10, to give you a flavor (one repeats for both in-state and out-of-state students).

And these are just the worst performers. There are many more schools where the average return on a degree is low enough that students would be better off putting their money in stocks or bonds.

To be clear, Payscale is not performing the most precise analysis imaginable. We're talking about broad averages based on user submitted data (the site does let you break down ROI by major, for what it's worth). And crucially, Payscale doesn't compare the alums of low-ranked colleges to demographically similar high school grads. It compares them to the earning power of the median high school graduate — and some of the students graduating from Shaw University or the University of Montevallo might have weaker skills than the typical kid who goes into the world with just a high school diploma.

But it does reinforce why we so desperately need high-quality consumer information about higher education. In the past, the higher-ed lobby has stood in the way of allowing the Department of Education to track college graduates over the long term to keep tabs on their lifetime earnings — what's known as a "unit-record system." And as a result, we have to rely on less complete government surveys, or less-than-ideal crowd-sourced databases like Payscale's. As a result, some students are going into college financially blind, and they could be ending up poorer for it — literally.

© 2014 Slate

The 10 worst college returns on investment

School name2013 cost*20-year net ROI **Annual ROI ***

Maryland Institute College of Art$148,500 -$34,200 -1.1%

Morehead State University $86,740 -$42,700 -3.2%

(Ky.) (out-of-state)

Adams State College (Colo.) (out-of-state) $98,090 -$43,600 -2.7%

Fayetteville State Univ. (N.C.) (in-state) $27,020 -$45,400 <-10.6%

Univ. of Montevallo (Ala.) (out-of-state) $86,190 -$60,200 -5.7%

University of N. Carolina at Asheville $98,510 -$62,500 -4.8%

(out-of-state)

Bluefield College, Bluefield, Va. $105,300 -$65,600 -4.6%

Savannah (Ga.) State University$91,710 -$82,300 -10.6%

(out-of-state)

Fayetteville State University $77,310 -$95,700 <-10.6%

(out-of-state)

Shaw University (N.C.) $80,850 $-121,000 <-10.6%



* The total cost to attend the school (tuition, room and board, books and supplies) weighted for the length of time it takes most students to graduate with a bachelor's degree.

** The total income that a graduate will earn after graduation in 20 years of working, minus both what they would have earned as a high school graduate and the cost of college (tuition, room and board, books and supplies), minus the average financial aid amount awarded to students. It is their net earnings in 20 years as a college graduate.

*** Allows you to compare the return over 20 years when investing your money in a degree at a certain school, as opposed to investing your money in other ways, like the stock market or bonds.

Comments
Editorial: Congress should block efforts to expand offshore drilling

Editorial: Congress should block efforts to expand offshore drilling

Timing is everything, and Sen. Bill Nelson seized the right moment this week to call on his colleagues to pass legislation he filed earlier this year that would block the Trump administration from opening additional areas to offshore drilling. With t...
Updated: 9 hours ago

Another voice: Alabama picks an honorable man

THANK YOU, Alabama.In Tuesdayís special election, the state by a narrow margin chose to spare the nation the indignity of seating an accused child molester in the U.S. Senate. Though the stain of electing Republican Roy Moore would have sullied Alaba...
Updated: 9 hours ago
Editorial: Tax cuts arenít worth harm to Tampa Bay

Editorial: Tax cuts arenít worth harm to Tampa Bay

As congressional negotiators hammer out the details on an enormous, unnecessary tax cut, the potential negative impact on Tampa Bay and Florida is becoming clearer. The harmful consequences stretch far beyond adding more than $1.4 trillion to the fed...
Published: 12/12/17

Another voice: Privacy in the internet age

How much information about you is on your cellphone? Likely the most intimate details of your life: photographs, internet searches, text and email conversations with friends and colleagues. And though you might not know it, your phone is constantly c...
Published: 12/10/17
Updated: 12/11/17
Editorial: Grand jury could force reforms of juvenile justice system

Editorial: Grand jury could force reforms of juvenile justice system

Confronted with documentation of sanctioned brutality and sexual abuse in Floridaís juvenile detention centers, the reaction from Gov. Rick Scottís administration was defensive and obtuse. So itís welcome news that Miami-Dade State Attorney Katherine...
Published: 12/08/17
Updated: 12/11/17

Editorial: U.S. House sides with NRA over stateís rights on concealed weapons permits

With the horror of the mass shootings at a Las Vegas country music concert and a small Texas church still fresh, the U.S. House finally has taken action on guns. But the bill it passed last week wonít make Americans safer from gun violence. It is an ...
Published: 12/07/17
Editorial: Hillsborough cannot afford pay raises for teachers

Editorial: Hillsborough cannot afford pay raises for teachers

There is no satisfaction for anyone in the standoff over pay raises between the Hillsborough County School District and its teachers. Most teachers across the nation already are underpaid, but this district simply cannot afford the raises teachers ex...
Published: 12/07/17
Editorial: Impact of Water Street project extends beyond buildings

Editorial: Impact of Water Street project extends beyond buildings

With a buildout of $3 billion encompassing entire city blocks, itís obvious that Jeff Vinikís plans will change the look and feel of downtown Tampa. But the Tampa Bay Lightning owner unveiled a broader vision last week that reflects how far the impac...
Published: 12/06/17
Updated: 12/08/17
Editorial: Make texting while driving a primary offense

Editorial: Make texting while driving a primary offense

It is dangerous and illegal to text while driving in Florida, and police should be able to pull over and ticket those lawbreakers without witnessing another violation first. House Speaker Richard Corcoran has lent his powerful voice to legislation th...
Published: 12/06/17
Updated: 12/07/17

Editorial: Outsourcing common sense on St. Petersburg Pier naming rights

St. Petersburg officials predict that selling the naming rights to parts of the new Pier could generate $100,000 in annual revenue. But first the city wants to pay a consultant to tell it how and to whom to sell the rights. Why do city officials need...
Published: 12/06/17
Updated: 12/07/17