Rethinking return on investment in California higher education
Riley Burr
January 26, 2026
OPINION – Golden Opportunities, a recent report from the College Futures Foundation using data compiled by esteemed researcher Michael Itzkowitz of The HEA Group, shines a light on one of the most popular topics in higher education: return on investment (ROI). But the results and methods deviate significantly from other ROI studies, leaving readers unsure of the ROI that is truly offered by higher education institutions in California.
Itzkowitz measures ROI as the number of years it takes students to recoup the net cost to earn a credential. Unfortunately, this approach fails to account for the enormous taxpayer subsidies public institutions receive, especially in California. As a result of these subsidies, California’s community colleges are able to offer low and sometimes free tuition to students. The programs supported by those subsidies have a cost, but most of that burden is carried by the contributions of Golden State taxpayers rather than the student. An ROI calculation that focuses only on the time to recoup net educational costs thus fails to accurately capture the quality of the educational programs being measured. Private and for-profit schools do not receive those subsidies to nearly the same extent and therefore must charge students more for their tuition. This doesn’t mean these programs are of lesser quality, only that the student bears the cost of education rather than the taxpayer, and cheaper doesn’t always mean better.
