Report: College pays for taxpayers

California reaps $4.50 in benefits — higher taxes and less social welfare spending — for every $1 invested in the state’s universities, concludes California’s Economic Payoff: Investing in College Access & Completion, a Berkeley report for The Campaign for College Opportunity. The study did not look at the state’s investment in community colleges.

The return for college graduates is $4.80, twice the return for those who complete some college but don’t earn a degree.

In 20105, relative to those with only a high school degree, those completing at least a Baccalaureate of Arts (BA) can expect to spend an additional seven years working. While working, they will earn more; between the ages of 25 and 64 they can anticipate earning an additional $1.3 million in wages and salary, and receive more than an additional $1.5 million in total personal income, which includes all other income from sources such as rentals, investments, or transfer programs.

These college “completers” will also put fewer demands on the state’s safety net. On average, they are likely to spend two fewer years receiving aid, four fewer years in poverty, and will spend 10 fewer months incarcerated. As might be expected, the recession has widened the gulf between the more highly educated and those with only a high school degree (or less).

Of course, there’s a big difference in academic performance and motivation between people who never enroll in college, those who start but don’t finish and those who earn a bachelor’s degree.  If more low-achieving students enrolled in college or more marginal students completed a degree, they wouldn’t be likely to do as well as the high achievers.

Job outlook brightens for graduates

Employers expect to hire 10.2 percent more new college graduates this year than they did last year, according to the National Association of Colleges and Employers Job Outlook update.

Median starting salaries for the class of 2012 are up 4.5 percent to $42,569 a year, NACE reports. Engineering jobs pay the most — a median of $58,581.

Not everyone can be a plumber

Stop sneering at art history majors, writes Virginia Postrel on Bloomberg News. Pundits blame underemployed college graduates for picking impractical majors, she argues, citing Bill Frezza’s attack on the college entitlement mentality in Real Clear Politics.

“Many people that go to college lack the smarts and/or the tenacity to benefit in any real sense,” he wrote. “Many of these people would be much better off becoming plumbers — including financially. (No shame in that, who’re you gonna call when your pipes freeze in the middle of the night? An M.A. in Italian art?)”

Only 12 percent of college students major in the humanities, a tiny fraction in art history. The most popular major is business. Add in economics and STEM  (science, technology, engineering and math) and nearly half of graduates have practical majors.  ”The rest, however, aren’t sitting around discussing Aristotle and Foucault.”  Many are studying health, education and graphic design, fields they think will lead to a “practical, job-oriented credential.”

Nobody knows which subjects will turn out to be “right” in the coming decades, writes Postrel, who earned an English major in the late ’70s. Her practical skills — excellent typing and journalism — are now obsolete, or nearly so.

The skills that still matter are the habits of mind I honed in the classroom: how to analyze texts carefully, how to craft and evaluate arguments, and how to apply microeconomic reasoning, along with basic literacy in accounting and statistics. My biggest regret isn’t that I didn’t learn Fortran, but that I didn’t study Dante.

Unfortunately, many college students don’t learn analysis or argumentation. They lack the broad knowledge that makes it possible to “figure out what you don’t know and build on what you do know to adapt to new situations and new problems.”  Frezza is talking about people who lack “smarts” and tenacity and practical skills. There are a lot of those folks out there, even if few of them studied Italian art history.

The argument that public policy should herd students into STEM fields is as wrong-headed as the notion that industrial policy should drive investment into manufacturing or “green” industries. It’s just the old technocratic central planning impulse in a new guise. It misses the complexity and diversity of occupations in a modern economy, forgets the dispersed knowledge of aptitudes, preferences and job requirements that makes labor markets work, and ignores the profound uncertainty about what skills will be valuable not just next year but decades in the future.

Pundits “can experiment on their children,” but the rest of the population is not “lab mice,” Postrel concludes.

One of my daughter’s friends majored in art history (on her parents’ dimes). She’s now supporting herself as a prop designer for independent movies. If she’d tried for a STEM major, she’d probably have flopped.

Study: For-profits lag in student outcomes

For-profit college students don’t do as well as similar students at public and private nonprofit colleges, according to a draft research paper (pdf) by Harvard economists. From Inside Higher Ed:

“For-profits disproportionately attract minority, older, independent and disadvantaged students,” according to the study, which assessed student outcomes after factoring in observable differences in populations who have attended different types of colleges.

. . . The research found that for-profits have some competitive strengths, such as in first-year student retention rates compared to community colleges. But the adjusted data showed for-profits lagging behind other types of colleges in areas such as employment outcomes, student satisfaction with academic offerings, debt levels and loan default rates — gaps that probably cannot be fully explained, the researchers say, by the greater propensity of students at the colleges to have prior risk factors.

Researchers compared first-time undergraduates, but did not analyze older, returning students.

The vast majority of students at for-profit colleges expressed satisfaction with their courses of study and academic programs. But the study found that they report “significantly lower satisfaction than observably similar students” at other institutions.

Not surprisingly, for-profit students, who pay unsubsidized tuition, are less likely to say their education was worth the cost or that their student loans were a good investment.

Given the constraints of the data, the study is a “conversation starter” rather than the last word, said David Deming, one of the authors.

For-profits have strong business models that often allow for a quicker response to changing labor markets than their nonprofit competitors, according to the study’s authors. For example, the sector currently produces 51 percent of associate degrees in computer and information services. And for-profit offerings in health and medical fields, where demand is high, are growing faster than at nonprofits.

. . . “Regulating for-profit colleges is tricky business,” said the study. “The challenge is to rein in the agile predators while not stifling the innovation of these nimble critters.”

Postsecondary paths out of poverty

“Employment is the answer to poverty. Education is the answer to unemployment,” said Sharon Morrissey, senior vice president for the North Carolina Community College System (NCCCS), at the inaugural meeting of the Center for Analysis of Postsecondary Education and Employment (CAPSEE) at Teachers College, Columbia University.

CAPSEE will research how well a variety of postsecondary pathways—short-term occupational degrees, non-credit workforce programs, associate and bachelor’s degrees in an array of subjects—prepare students for the workforce. Researchers will work with North Carolina, Virginia, Ohio, Florida and Michigan to link education and employment data.

“With these very large state data sets, we can look at the relationship between different programs or majors or degrees with employment on a much more detailed level,” said (CAPSEE director Thomas) Bailey.

Florida already links high school, college and clearinghouse data for all students in the state, said Judith Scott-Clayton, a Community College Research Center researcher at Teachers’ College. It’s possible to analyze high school grades, 10th grade test scores and college outcomes. Scott-Claytone plans to add a link to national census information to track long-term outcomes for students who leave the state after college.

Students who earn a credential from California community colleges double their earnings in four years, said  Patrick Perry, vice chancellor for the California Community Colleges.

The case for and against college

Is a college degree worth (in future earnings) the time and money it will take? The Value of College Is: (a) Growing (b) Flat (c) Falling (d) All of the Above answers Derek Thompson in The Atlantic. He presents the case for and against college in 10 charts.

The case for college is established: The value of higher education has never been higher, period. A college degree — not only from Harvard, but from community colleges — turns out to be a better investment than stocks or homes. The fastest growing jobs in the next 10 years require an associate or bachelor’s degree, and every piece of evidence suggests that more education correlates with more income and a lower chance of unemployment.

The case against college is gaining steam: Tuition costs are rising and graduates’ incomes are flattening. Male bachelor’s-degree holders saw a nearly 10 percent decline in real pay over the last 10 years, according to recent Census figures. The U.S. has the highest college-­dropout rate in the developed world, and studies have found that college confers “exceedingly small or empirically nonexistent” gains in academic skills.

Who’s right? Well, all of these claims are true. The value of college has never been higher. But growth of the college premium has slowed, and the wages of college graduates have fallen in the last 10 years.

Follow the link to check out all the charts. For me, the most striking shows that men are doing much worse, even with a college degree, while women continue to benefit from a college education.

Louisiana: CC grads earn more, work more

Louisiana’s associate-degree graduates are more likely to find jobs — at higher pay — than graduates with four-year degrees, according to a state report.

Eighteen months after graduation, 72.5 percent of associate-degree graduates were employed in Louisiana, compared to 59.5 percent of graduates with bachelor’s degrees, 60.5 percent with master’s degrees, 38.3 percent with doctorates and 50.4 percent with professional degrees.

New associate degree holders — many with degrees in medical and technical fields — earned $3,000 a year more than new four-year graduates.

Engineering graduates with bachelor’s degrees were the top earners, starting at almost $57,000.

“In 1970, you could be middle class with a high school diploma or less and the sweat of your brow,” (Commissioner of Higher Education Jim Purcell) said. In 2007, the study shows, only 39 percent of the “middle class” in Louisiana had only a high school education.

. . . “We see the need for a strong community college system,” he said. “Ideally, we’d have 60 percent of our students enrolled in community colleges and 40 percent enrolled in four-year institutions.”

Pew: Women value college more than men

It’s not surprising more women are going to college and earning degrees: Women value higher education, while men have doubts, according to a Pew Research Center survey.

Half of all women who have graduated from a four-year college give the U.S. higher education system excellent or good marks for the value it provides given the money spent by students and their families; only 37% of male graduates agree. In addition, women who have graduated from college are more likely than men to say their education helped them to grow both personally and intellectually.

Women passed men in educational attainment in 1992 and the gap continues to widen: In 2010, 36 percent of women ages 25-29 had earned a bachelor’s degree, compared to only 28 percent of their male counterparts.

The gender gap is largest for blacks: 63 percent of young black college graduates are female, 37 percent are male.

A majority (53 percent) of Asian-Americans in their late 20′s have earned a bachelor’s degree, compared to 39 percent of whites, 19 percent of blacks and 13 percent of Hispanics.

A college education is needed to get a good job, say 69 percent of adults polled by Gallup for the Lumina Foundation for Education.

Fifty-seven percent strongly agree or agree that people who have a college degree have a good chance of finding a quality job; 15 percent disagree.

College grads start at $36,000

A college degree’s worth depends on the major, reports UPI.

Georgetown University’s Center on Education and the Workforce found a degree in engineering can be worth more than $1 million more in lifetime earnings while a degree in education can be worth $241,000 more. The Hamilton Project, an economic policy program sponsored by the Brookings Institution, put the average value of a college degree at $570,000 on an average $102,000 investment.

Majors with the highest median pay were petroleum engineering, pharmaceutical sciences and administration, mathematics and computer sciences, aerospace engineering, chemical engineering, electrical engineering, naval architecture and marine engineering, mechanical and metallurgical engineering, and mining and mineral engineering.

The majors with the lowest median earnings were counseling and psychology, early childhood education, theology and religious vocations, human services and community organizations, social work, drama and theater arts, studio arts, communication disorders sciences and services, visual and performing arts, and health and medical preparatory programs.

Job stability was high for graduates in geology, pharmacology and student counseling, while unemployment was highest for graduates in social psychology, nuclear engineering, and educational administration.

“The bottom line is that getting a degree matters, but what you take matters more,” said Anthony P. Carnevale, director of the Center on Education and the Workforce.

A year after graduation, 84 percent of 2007-08 first-time bachelor’s degree recipients were working, 9 percent were looking for work and 7 percent were not in the labor force, an NCES report finds.

The median income was $36,000, up from $29,800 in 2001.

Two-thirds of college graduates owe money: The average debt is $24,700. That’s up from 2001, when 62 percent of graduates owed an average of $17,800.

The most popular fields of study were business-related fields (23 percent); science, technology, engineering, or mathematics (16 percent); social science (16 percent); and humanities (12 percent).

Of course, college doesn’t pay for those who never earn a degree. In 2009, 70.1 percent of high school graduates enrolled in college; three-quarters of those in the lower 40 percent of the class probably won’t graduate. Only 27 percent of Americans hold a bachelor’s degree or higher, according to a 2006 Census Bureau survey. Another 7.4 percent had an associate’s degree.

A costly way to show who’s smart

Most people don’t need a college education to do their job, but they need a degree to get hired, writes Daniel Indiviglio in The Atlantic. It’s a very expensive way to identify who’s smart enough to do a job, he writes.

. . . when high school standards declined and college became more popular, some applicants stood out above others as being more educated and potentially smarter than those with only a high school diploma. If the trend keeps up, however, a time will come when a college degree isn’t enough either: masters degrees will be commonly sought, as the value of college degrees fall to be worth as little high school degrees are today, since so many applicants will have them. If this trend keeps up forever, perhaps we’ll one day have locksmiths with PhD’s.

College is the best investment on the market (for those who complete a degree), counters Derek Thompson, also in The Atlantic. Over a working lifetime, “the typical college graduate earns $570,000 more than the average person with only a high school diploma.”

Let’s say you’re deciding where to invest $100,000 at age 18. Maybe you think to put it in gold, corporate bonds, U.S. government debt, or hot company stocks.

The $102,000 investment in a four-year college yields a rate of return of 15.2 percent per year, more than double the average return over the last 60 years experienced in the stock market” and more than five times the return in corporate bonds, gold, long-term government bonds, or housing, according to a report by Michael Greenstone and Adam Looney.

Note that the associate degree’s rate of return is 20 percent, higher than the pay-off for the bachelor’s degree. I’d guess that’s because the costs of attaining the degree are lower and many associate degrees go to nurses, who make good money.