- Colleges that primarily award bachelor's degrees give graduates the best long-term return on investment, according to a new report from Georgetown University's Center on Education and the Workforce (CEW).
- Students who earn degrees from private nonprofit colleges tend to see a better long-term return than students who graduate from public universities, even though the former group generally takes out twice as much in loans.
- Community colleges and certificate programs have the highest short-term returns because they can give students valuable credentials relatively quickly and at a low cost.
In the report, the researchers ranked the return on investment for 4,500 institutions by using data from the College Scorecard, a database launched in 2015 to give prospective students information that could help them select a college.
The U.S. Department of Education expanded the Scorecard earlier this year with a trove of new data, including information on institutions that primarily award nondegree credentials and student debt levels by field of study.
The findings "buttress the idea that college is a worthwhile investment," the researchers wrote, noting that students may have to wait to reap their rewards.
For example, the median value to graduates across all colleges is $107,000 a decade after enrollment. But 40 years after enrollment, that value grows to $723,000. The report evaluates the worth of college credentials by calculating their net present value, which estimates the current worth of graduates' future earnings.
The value of a degree from an institution can "change dramatically over time," the researchers note.
Babson College, a private nonprofit business school near Wellesley, Massachusetts, doesn't crack the top 300 schools when looking at its short-term value. But after 40 years, Babson degrees are worth nearly $2 million, putting the school seventh on CEW's ranking based on long-term return on investment.
Eight of the top 10 colleges with the highest long-term gains are private nonprofit bachelor's institutions. The list includes the usual suspects, such as Stanford and Harvard universities, as well as lesser-known pharmacy schools and maritime academies.
"If you look at this, you see that traditional elite institutions are the minority," said Anthony Carnevale, director of the Georgetown CEW, in an interview with Education Dive. "Specialty colleges tend to outperform the traditional liberal arts colleges."
Top 10 colleges with the highest long-term value
|40-year net present value
|Albany College of Pharmacy and Health Sciences
|St. Louis College of Pharmacy
|Massachusetts College of Pharmacy and Health Sciences
|Massachusetts Institute of Technology
|Maine Maritime Academy
|United States Merchant Marine Academy
Source: Georgetown CEW
Colleges that rank in the middle of the pack based on long-term value have "enormous variation," Carnevale pointed out. While most are public colleges and universities, some are private nonprofits or for-profits. Institutions with low long-term economic value tended to include theological institutions, beauty schools and colleges specializing in the arts.
However, he also noted that the report doesn't explain why some institutions provide lower long-term gains than others. Among the common causes could be that the students an institution serves are less prepared for college than others, or that the college provides degrees in relatively low-paying fields.
The institutions with the greatest short-term value tend to be those that primarily award certificates.
Indeed, emerging research suggests nondegree credentials can improve economic mobility, especially for people working in security, architecture and engineering, and construction jobs.
More study of nondegree credentials' impact will be critical as lawmakers consider offering Pell Grants for programs as short as eight weeks.
So far, there is limited data on the economic benefit of programs of that length, but the Georgetown CEW report suggests that several certificate-oriented schools have a 40-year value of more than $500,000.
Even so, short-term programs and their outcomes can vary significantly. "There's a tremendous amount that we just don't know about these programs," James Kvaal, president of The Institute for College Access and Success, told Education Dive earlier this year. He added that Congress should "move slowly" in this area.