The acceptance letters are out and the college choices have been made, but how do students and parents footing the bill for a particular college know that it’s worth the cost, which can run as high as a few hundred thousand dollars?
The truth is they won’t really know the answer until their child graduates and joins the labor market. They can, however, get a good idea of how a school might impact their child’s economic future from its “value added” contribution compared to others, according to new research from the Brookings Institution.
Unlike most college rankings, the Brookings research focuses on the impact that colleges have on the economic success of alumni, eliminating as much as possible the impact of a student’s background.
“The children of Rockefellers on average will have higher earnings than the children of poor families,” says Jonathan Rothwell, a senior fellow at Brookings and co-author of the report “Beyond College Rankings: A Value-Added Approach to Assessing Two- and Four-Year Schools. “That doesn’t help in trying to decide what the college is doing and the quality of content and skills a student will learn.” One school may fare better simply because its admission standards are more selective. That selectivity, exemplified by the admissions rate, is included in other college rankings such as U.S. News.
The Brookings report, in contrast, does not include admission rates. Instead it looks at several variables when comparing schools, including salaries of graduates 10 years after graduation (called mid-career earnings), market value of different occupations, percentage of graduates prepared to work in STEM fields (science, technology, engineering and mathematics), graduation rates, financial aid and loan repayment rates during the first three years of graduation. Data comes from the Department of Education, LinkedIn, PayScale.com and alumni.
The results are somewhat surprising. Looking at mid-career earnings — the most precise and meaningful measure in the report, says Rothwell — CalTech, MIT and Stanford University rank among the top 10 schools, but so do Colgate University, Carleton College, Manhattan College and Washington and Lee University — all liberal arts schools. Also among the top 10 institutions: Rose-Hulman Institute of Technology, which focuses on engineering, and Clarkson University, oriented toward engineering and technology. Neither are household names. A strong STEM orientation helps to explain the top rankings for Rose-Hulman and Clarkson but not the top rankings of some liberal arts schools.
“It comes down to what we can an X factor,” says Rothwell. “We can’t measure it. It could be a strong alumini network or a particularly strong faculty with a focus on teaching.” It could also include the impact of a college’s administration and student ambition, according to the study. “Whatever the reason, Colgate, Carleton and Manhattan place many graduates into top international companies like IBM, Google, JPMorgan and Wells Fargo,” the report states.
The Brookings study can be useful for students who haven’t applied to college yet. “Most students and parents probably have five to 10 schools in mind,” says Rothwell. “These are some broad measures that will at least shed light on how well they will do economically if they finish.”
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