POLITICO. September 23, 2013. To determine if a college degree is worth the money, states, private companies and the federal government are looking less to diplomas and more to pay stubs.
The Obama administration and a growing number of states have embraced the idea that graduates’ earnings in the years after graduation can measure the quality of a college or major. Systems to display wages by college and program are gaining steam and growing in sophistication. They could transform how Americans evaluate the value of a college education — and, eventually, whether state and federal governments will pay for it.
The salary data, though, are riddled with holes. Federal law prohibits creating a national database that would link students’ tax records with their educational information. And the administration’s enthusiasm pits it against many in higher education who say earnings are a myopic way to judge the impact of a college degree.
“It’s devaluing what higher education really means,” said Patricia McGuire, president of Trinity Washington University. She said she was disappointed that the president has taken a “schoolmarmish tone” of scolding colleges. “I don’t think that elevates anything. I think that cheapens the whole enterprise.”
Policymakers argue that students taking on thousands of dollars of debt should have a clear idea of what they’ll earn later on. At its heart, it’s a debate over a deep question: What is college for?
“There are a lot of things we hope people will get out of the higher education system that are not captured in salary,” said James Kvaal, deputy director of the Domestic Policy Council, at a National Press Club event last week. But for students, choosing a college “is one of the most important decisions of their lives, and if we have access to information that will help them make these choices, we should share that information.”
The Education Department will soon add earnings data to the empty box on the Education Department’s College Scorecard, which is meant to help students with college choices, Kvaal said. President Barack Obama touted the scorecard in his State of the Union, but when it was unveiled, the box on graduates’ median earnings was conspicuously blank.
“They need to fill that bottom line of the report card out desperately,” said Mark Schneider, president of College Measures, a partnership of the American Institutes for Research and Matrix Knowledge to research higher education data. “It’s embarrassing to have one of your key metrics be ‘Ask your school.’”
President Barack Obama hopes to go beyond disclosure. He has proposed rating colleges on several criteria, including graduates’ earnings. Colleges that do well in those ratings would get more federal financial aid.
In a speech Friday, Education Secretary Arne Duncan strove to illustrate that he understood concerns like McGuire’s. The ratings wouldn’t understate the value of the liberal arts or count against colleges whose graduates go into low-salary public service jobs, he said. But he didn’t back down from the central premise.
”I absolutely reject the idea that it’s impossible to create a meaningful college rating system for students and families,” he said. “I reject the idea that the value of a college education is so elusive that no rating system can ever meaningfully help consumers determine its value.”
So far, the most ambitious efforts to get the full picture of what graduates are earning have been at the state level. College Measures has released data on five states, including Texas and Virginia, with more on the way.
There are drawbacks: Schneider’s data set doesn’t include students who move to another state after graduation. At the College of William & Mary — where College Measures says graduates with bachelor’s degrees earn an average of $34,571 the first year after graduation — Schneider has income data for 22 percent of graduates.
College Measures’ first reports looked at salaries for the first year after graduation. That produced some counterintuitive results: Certificates in vocational fields seemed like a better deal than a bachelor’s degree. While an English major at the University of Virginia earns $31,388 the first year after graduation, a graduate of Northern Virginia Community College with a two-year degree in dental hygiene earns $59,394.
Looking at just first-year data can miss the value of a liberal arts degree, said Amy Laitinen, deputy director for higher education at the New America Foundation and a supporter of better data on earnings and other outcomes.
“You want those skills to be acknowledged and rewarded in the world,” Laitinen said. “If you just look at generic earnings by sector and then earnings a couple of years out, we’re going to miss the real impact that those skills have.”
Schneider’s next reports will link up with a 31-state database of employment information to try to capture more graduates. And they will pull in longitudinal data to see whether underpaid English majors do eventually catch up. The next report for Texas will include earnings up to 10 years after graduation, he said.
California is already taking a longer view. Community college officials have created a database of the median salaries for graduates broken down by major. It includes information on what students were making two years before graduation and two years and five years after.
The data, including some not yet available to the public, can paint a vivid picture of student dreams fulfilled or dashed. There are clear-cut success stories. Two years before graduation, some students studying to be radiology technicians were already working in health care, with an average salary of less than $20,000 per year. Others had a smattering of jobs in retail and food service. Five years after they graduated, four out of five were working in health care, divided among hospitals, doctors’ offices and diagnostic imaging centers. The median salary was nearly $70,000.
For students studying commercial music, the outcomes weren’t as good. Before getting their degrees, they were temping, waiting tables and working retail. Five years later, many still were in the same sectors. Even the handful of independent performers had a median salary of less than $10,000 per year.
Creating a system like California’s at the federal level, which could track students across state lines, would require a database to link federal income information to educational records. Congress banned the creation of such a database, known as a unit record system, in 2008, an effort spurred by protests from private colleges and privacy advocates and spearheaded by Republicans.
“This is not a technical problem,” Laitinen said. “This is a political problem, and it’s an inexplicable political problem given how much the American people are clamoring right now for better information.”
Earlier this year, there were signs that the politics of unit records might be shifting. Sen. Marco Rubio (R-Fla.) co-sponsored a bill to disclose earnings information and create a unit record system. House Majority Leader Eric Cantor (R-Va.) praised an earlier version of the bill, which didn’t include the unit records provision, in February. But since then, concerns about big data have increased, driven by the revelations about the National Security Agency, and the measure has stalled.
“The politics are still pretty nasty,” Schneider said, although he thinks the climate has improved since 2008, when Rep. Virginia Foxx (R-N.C.) inserted language banning a federal unit record system into the reauthorization of the Higher Education Act. “It’s still an uphill battle.”
The growing interest in salary data also presents another dilemma: Is disclosure on its own enough to drive students away from programs that won’t help them repay their debt? Or should states and the federal government reward or penalize colleges based on what their graduates earn?
“There needs to be a really vigorous discussion about what to do with that information other than make it available,” Laitinen said. She said she supports using it to make sure that taxpayers are “paying for the things that matter, and that includes value.”
College leaders say they fear budget-conscious states and Congress will use a poor return on students’ investment as a reason to cut funding to specific majors and programs. There’s certainly interest: In addition to Obama’s plan to take earnings into account when rating colleges, the Texas technical college system is preparing a new funding formula based entirely on graduates’ salaries after graduation.
Even the developers of some databases fear the step after disclosure. The California database was meant to be a service for students, said Patrick Perry, a vice chancellor with the system who oversaw its creation. But he said he would strongly resist efforts to link state funding to student outcomes.
“I think it would be somewhat dangerous to have this taken to the extreme where it becomes a policy tool or lever that policymakers use as something to try and affect a free-market job economy,” Perry said.
In plans like Obama’s, some hear echoes of Florida Gov. Rick Scott, a Republican, who angered and worried academics in 2011 when he proposed shifting more funding to science, technology, math and engineering programs because, he said, it isn’t “a vital interest of the state to have more anthropologists.”