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

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