A new study contains good news about the value of a liberal-arts education. But is that best measured by dollars and cents?

What’s the ROI on ROI Studies?

The liberal arts got a lot of love in headlines this week. They boil down to this: Yes, a liberal-arts education really does pay off!

In fact, give it enough time, a new study concludes, and the median return on investment of attending a liberal-arts college is nearly $200,000 higher than the median ROI for all colleges.

The study — which Georgetown University’s Center on Education and the Workforce released this week — has this main takeaway: Students who attend liberal-arts colleges see a median return on investment of $918,000 within 40 years.

Some of this week’s headlines, though, temper the rosiness. They point to the limits and caveats of studies like this.

Four decades can be a long time to wait, especially if you’re one of the 44 million Americans who have student debt to pay off between now and then, says Robert Kelchen, an associate professor of higher education at Seton Hall University.

There are broader questions in the realm of ROI reports: Are outcomes of a thing like a liberal-arts education best measured by dollars and cents? And how much meaning can we or should we really make of seemingly precise 40-year financial projections?

Martin Van Der Werf, one of the study’s co-authors, believes putting a real dollar value on outcomes is important. “For people who are applying to college, looking at spending a lot of money, this is one among many factors that you probably ought to take a look at,” he says.

But it’s not easy to predict the value of a given university, Kelchen says, and ROI measures can be misleading.

A graduate’s job opportunities and prospective earnings can often be determined by their family’s social standing, he says. Students from wealthier families are more likely to have connections and find a good paying job after graduation no matter what college they attend.

The study does point out correlations between certain factors and higher ROIs. You’ll find better than average outcomes at colleges that:

  • Are higher-ranked. (Places like Carleton, Kenyon, and Williams Colleges, to name a few.)
  • Enroll more STEM majors.
  • Have fewer students from low-income families.

Facts like geography matter, too. Colleges outside of the Northeast and Mid-Atlantic regions — areas where workers tend to earn more than in many other regions of the country — often have below-average ROIs, the study found.

In the end, calculating a college-wide worth might not be the right idea at all.

Kelchen, for instance, suggests comparing students from similar financial backgrounds who study comparable majors and breaking down ROI for students from different groups, such as those who are first-generation college students or from different racial and ethnic backgrounds.

“It’s also important to try to get at how much of this ROI is just because of what the student brings,” he says, “versus what the college actually does.”

— Andrea Klick


Elizabeth Warren Has a Plan To Cancel Student Loans Without Congress

A little-known provision allows the U.S. education secretary to erase student loan debt without going to Congress. Elizabeth Warren says if elected president she would put that provision to use. (NPR)

For Profit or Students? International Education Shakes Up Alabama Campuses

Private companies have partnered with two public universities in Alabama to recruit international students, but not everyone’s pleased with the changes they bring. (al.com)

  • After the initial story on al.com, UAB also released its full contract with the international recruiting company, including details of commissions earned by recruiters for each student who completes a program and enrolls at the university.
  • For more coverage of private recruiters and the future of their partnerships with universities, see this recent issue of Karin Fischer’s latitude(s).

For-Profit Programs Not the Only Ones That Would Fail Gainful-Employment Test

Data in a new online tool raise questions about how well public and nonprofit colleges and universities are doing in helping students earn enough to repay their debt. (Inside Higher Ed)

Hopkins Says Scrapping ‘Legacy’ Preference Has Boosted Campus Diversity

The private research university is now proclaiming publicly a shift it made years ago without fanfare. (The Washington Post)


We’re entering the season of higher-ed conferences. We’d love to catch up with newsletter readers. At least one of us will be at the following meetings in the coming months. Please reach out if you’d like to connect.

But Wait … There’s More

The Weekly Dispatch is just one of three newsletters that Open Campus now offers. For more smart coverage of higher ed, check out the other newsletters in our collection:

  • latitude(s) by Karin Fischer. Karin has spent more than a decade covering the changing relationship between American colleges and the world. Sign up here for her sharp, timely, and incisive analysis — or, as she’s put it, “your global education news, with a little bit of attitude.”
  • Next by Jeff Selingo. Jeff is an expert on the changing landscape of higher ed, which he’s written about for two decades. He’s the author of two New York Times bestsellers, and his next book — Who Gets In & Why: A Year Inside College Admissions — will be published by Simon & Schuster in September. Sign up here to get Jeff’s insights about what’s ahead for higher ed.