A career begins, however, with what a person majored in, not so much by where that person got the degree. What you earn depends much more on what you take in college than where you go. From a career perspective, college is more a market in program majors than a market in institutions.
A new approach introduced last week by the House Republican leadership, the PROSPER Act, recognizes that simple truth. Rather than ratings based on colleges, regulators would focus on the earnings outcomes of academic programs and college majors. Consumers would get program level information, including completion rates, loan repayment rates and the average earnings that a graduate gets out of each program. The data would allow consumers to compare cost and earnings returns in the same major at different colleges — the differences between an economics degree from Harvard University and one from the University of Massachusetts.
This is vital information to bring transparency to higher education, and help consumers make better decisions about post-secondary programs.
This new approach is timely for a number of reasons.
First, investing in college is not as straightforward as it seems. It used to be that the more college you got, the more money you would probably make. While that is still generally true, there are more and more exceptions: More than 40 percent of people with bachelor’s degrees get paid more than people with graduate degrees. Some one-year certificates pay more than college degrees. More than 30 percent of associate’s degree holders make more than the average bachelor’s degree recipient. And different bachelor’s degrees result in different earnings: Someone with a bachelor’s in petroleum engineering will make $3.3 million more in a lifetime than the holder of a bachelor’s in elementary education.
Second, the variety of post-secondary programs and credentials has become too vast for consumers to comprehend and evaluate by institutional reputation alone. The burgeoning post-secondary education system has become a Tower of Babel. Post-secondary programs of study more than quintupled from 1985 to 2010, from 410 to 2,260. Since 1950, the number of colleges and universities has more than doubled, and the ranks of college students have increased tenfold. At the same time, the number of distinct occupations has tripled, to more than 800.
Colleges and other post-secondary providers are responding to the newly burgeoning market with a blizzard of degrees, certificates, licenses, certifications, badges and other micro credentials, all of which purport to qualify the recipients to enter an occupation. Who really knows what they all mean?
Third, the best evidence of the need for better information is the buyer’s regret among former students. The majority of Americans (51 percent) would change their degree type, institution or major if they could do it over again, according to a Gallup Poll earlier this year. These regrets were influenced by a number of factors, but one was lack of information about a degree and the careers it would lead to.
Fourth, shifting from institutions to programs is one way to begin increasing our return on investment in higher education. Prices in higher education have been rising faster than family incomes for decades — with no end in sight. The post-secondary education system is spending more than $500 billion a year. Still, it is like a giant computer with no operating system.
Shifting the unit of value from institutions to individual programs would tighten the connection between learning and earning in ways that would encourage healthy competition among a more diverse array of program providers. It would also encourage specialization, moving us away from the cafeteria system in which every college has to have every program to be competitive.
The inescapable reality is that ours is a society based on work. The growing role of post-secondary education in the economy needs to be recognized in policy. If students are not equipped with the knowledge and skills necessary to get, and keep, a good job, they are denied the genuine social inclusion that is the real test of full citizenship. If college educators cannot fulfill their economic mission to help youths and adults become successful workers, they will fail in their cultural and political missions to create good neighbors, good citizens and lifelong learners.
House Republicans have it right. It is time to empower students and parents with the information they need to make better decisions about their education investments. When people choose to go to college, they don’t get to take a test drive. They are making one of the biggest investments of their lives. They deserve to know what they are paying for.
Anthony P. Carnevale is director and research professor of the Georgetown University Center on Education and the Workforce, an independent research and policy institute affiliated with the Georgetown McCourt School of Public Policy.