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THE VALUE EQUATION

Table of Contents
Executive Summary

Introduction

Degrees of Value

Measuring Graduates Success

15

The New Career Services

20

Conclusion and Methodology

26

The Value Equation: Measuring and Communicating the Return on Investment of a College Degree is based on a survey conducted by Huron
Consulting Group, Inc., was written by Jeffrey J. Selingo, contributing editor at The Chronicle of Higher Education, Inc. and is sponsored by
Lynda.com. The Chronicle is fully responsible for the reports editorial content. Copyright 2015.

03

Executive Summary
As the global economy increasingly demands a knowledge-based workforce, the
value of a college degree is growing exponentially. The so-called wage premium
of a college degree now is higher than ever before: A typical bachelors-degree
recipient earns 80 percent more than a high school graduate during a 40-year
career, more than $500,000 over a lifetime.
That wage premium has resulted in an enrollment surge in the past decade
for American colleges and universities. The number of students on campuses
has grown by more than one-third since the early 2000s, and institutions have
responded with a bevy of new academic programs to serve this market hungry
for new skills. The number of college majors tracked by the U.S. Department of
Education has increased by some 20 percent just since 2000.
Student demand also has allowed colleges to continue increasing their tuition
prices. When the recession of 2008 hit, average tuition in the U.S. consumed
some 40 percent of median earnings in the United States, up from less than a
quarter of income eight years earlier.
But as student debt surpassed more than $1 trillion in 2011, students and their
parents started to question what they were getting in return for the high cost
of a college degree. While the value of higher education remains undisputed,
prospective students and their parentsarmed with new tools that track the
career and earnings outcomes of graduatesare beginning to cast doubt on the
return on investment of certain majors and particular colleges.

A typical bachelorsdegree recipient earns

80 percent more than
a high school graduate
during a 40-year career.

THE VALUE EQUATION

In response, colleges are focusing more on the outcomes of their education and are putting in
place programs to better prepare their undergraduates for the job market. In an extensive survey
of college leaders, conducted by The Chronicle of Higher Education in the fall of 2014, six in 10 of
them reported an increase in discussions about job preparation for their graduates in just the past
three years.
The survey, completed by some 800 vice presidents, deans, and directors at two-year and fouryear colleges, focused on their attitudes about the value of their degrees, strategies to measure the
outcomes of their graduates, and what skills higher education should provide to students. Among
the highlights from the survey:

VALUE OF DEGREE. Overall, some

40 percent of college leaders
believe their institutions provide
an excellent value for the money
parents and students spend.
Officials at public colleges are
more likely than those at private
institutions to say that they provide
the best value for the dollar.

STUDENT DEBT. Survey respondents had

varied answers to what should constitute
minimal debt for graduates. Some
measured debt by the amount of time it
should take to pay it off. About a third of
respondents used a dollar amount, and
among them, a majority said that a graduates
debt should be under $25,000. (The average
graduate of the Class of 2014 left with about
$33,000 in debt, according to Edvisors, a web
site about planning and paying for college.)

STUDENT OUTCOMES. About a quarter

of institutions surveyed make job
preparation for their graduates a
very high priority. Private four-year
colleges were more likely to report job
readiness as a high priority, largely
because students and parents at those
institutions demand a return on their
hefty tuition investments.

OUTCOMES DATA. By and large, college

officials were opposed to publishing
career and salary outcomes of their
graduates either on their own or under
government mandate. Overall, only
a third of respondents said it was
reasonable for the federal government to
require outcomes data.

SKILLS FOR SUCCESS. While parents

and employers often want students
to graduate from college with specific
skills, those who run colleges believe
their job is to provide a well-rounded
education that gives graduates an
appreciation for the value of lifelong
learning.

CAREER SERVICES. Close to half of

the surveyed respondents reported a
budget increase in career planning and
placement services over the past five
years. A notable 14 percent of institutions
increased the budget for career services
by more than 25 percent.

05

Introduction
Institutions increasingly
are adding career-related
programs for undergraduates
to better prepare students
for the job market
and measure their success
long after graduation.

THE VALUE EQUATION

On a cold February night in 2013, President Obama, addressing a joint session of Congress for
his State of the Union, said that skyrocketing costs price too many young people out of a higher
education, or saddle them with unsustainable debt. The line drew applause from both sides of the
political aisle.
More than any other recent president, Barack Obama had used the annual address to announce
new higher-education proposals, many of which brought cheers from colleges and universities
who wanted more federal dollars for student aid.
But on this night, the president was not to announce any new federal investment in higher
education. Instead, he told the chamber that the next day his administration would release a new
College Scorecard that parents and students can use to compare schools based on a simple
criteria: where you can get the most bang for your educational buck.
Now there would be a government tool that turned college into a product to compare in the same
way consumers size up cars or televisions in Consumer Reports. Already, several states were
publishing public databases, collected through unemployment insurance records, that allowed
residents to compare colleges and majors based on the first-year incomes of graduates.
With these new tools, college officials worried that the success of a college degree would be
measured solely on the career outcomes and earning of graduates. Such measures, they said,
didnt track the value of college over a persons lifetime nor did they determine the less-tangible
benefits of a degree: better health and increased civic engagement, and the broad knowledge
that higher education instills in students. While higher-education organizations had published
reports outlining the economic benefits of a college degree for years, the emphasis now was on
comparing specific colleges and majors rather than citing national averages.
Its against that backdrop that college officials have attempted to redefine their approaches
to measuring student outcomes after graduation. For colleges and universities, simple postgraduate surveys no longer are enough for many prospective parents and students. Institutions
increasingly are adding career-related programs for undergraduates, some as early as freshman
orientation, to better prepare their students for the job market and measure their success long
after graduation.
This brief describes the strategies institutions are taking to improve and measure student
outcomes. It is based on a survey of vice presidents, deans, and executive directors at two-year
and four-year colleges; the survey explored their attitudes about the value of higher education,
student debt, the skills needed for todays job market, and the role colleges should play in
preparing their graduates for the workplace.

07

Degrees of Value
Every year, the College Board publishes Education
Pays, a report that documents the ways in which
both individuals and society as a whole benefit from
increased levels of education. Despite its focus on the
dual role that higher education often plays in the lives of
individuals, the College Board report largely is dominated
by the economic returns from higher education.

Introduction

The fallout from the global financial crisis was

somewhat slow to reach higher education.
By the time the housing market crashed in the
fall of 2008, colleges had already
welcomed
Nearly
80 percent of
their freshman class for the academic
year.
The
survey
respondents
following year, many colleges were forced to either
described the value
raise their discount rates or lower their expectations
their institutions
for enrollment. For the most part, however, college
provide to students
and university leaders were able to manage the
for the cost they pay
crisis, assuming that the economy would turn
as a very good or
around, as it had after past downturns.

excellent value.

THE VALUE EQUATION

In 2013, the College Board used the report to criticize those who question the value of higher
education through anecdotal evidence of graduates working as baristas at Starbucks with tens of
thousands of dollars of student debt. On average and for most students, the College Board wrote,
college is an excellent financial investment.
Not surprisingly, college officials in The Chronicle survey tend to agree. When asked to describe
the value their institutions provide to students for the cost they pay for their education, nearly
80 percent called it a very good or excellent value. Among the different sectors of higher
education, private-college officials were least likely to call their institutions an excellent value,
but only 6 percent of them called it a poor or fair value (see Figure 1). By comparison, in past
surveys by the Pew Research Center and Time magazine, around 40 percent of Americans have
described the value of college for the money spent as poor or fair.

FIGURE 1
VALUE OF THEIR INSTITUTIONS DEGREE COMPARED TO THE AMOUNT STUDENTS SPEND

2-Year

18%

42%

40%

38%

40%

2%

Public 4-year

5%

15%

2%

Private 4-Year

4%

16%

4%

17%

47%

31%

1%

Overall

41%

37%

Poor Fair Good Very Good Excellent

09

THE VALUE EQUATION

College officials also thought they were doing a good job in preparing their students for careers,
although they werent as exuberant on this measure. Three-fifths of respondents said their
institutions were doing very well or extremely well, with private four-year colleges far more
likely to report success in getting students ready for employment than two-year colleges, which
are often seen as workforce development engines (see Figure 2).

FIGURE 2
HOW WELL INSTITUTIONS ARE PREPARING GRADUATES FOR THEIR CAREER

2-Year

13%

31%

46%

10%

1%

Public 4-year

10%

32%

43%

14%

1%

Private 4-Year

5%

21%

57%

16%

2%

Overall

9%

28%

47%

14%

Not At All Well Not So Well Well Very Well Extremely Well
10

THE VALUE EQUATION

Indeed, the role colleges should play in preparing the workforce is often a subject of intense
debate these days. Higher-education officials tend to believe that institutions should provide
foundational skills, the so-called ability to learn how to learn, and employers should follow
by arming their workers with the specific skills needed to do a job. Overwhelmingly, survey
respondents said that the most important outcomes for their graduates were not having a job
requiring a college degree or graduating with little or no debt, but rather having an appreciation
for the value of lifelong learning, being intellectually well-rounded, and having a plan to achieve a
professional goal. (see Figure 3).

FIGURE 3
THE MOST IMPORTANT OUTCOMES FOR COLLEGE GRADUATES
62%

Having an appreciation
for the value of
lifelong learning

49%
65%
63%
56%
34%

Being intellectually
well-rounded

57%
61%
56%
55%
57%
58%

Having a defined
professional goal and a
plan to achieve that goal
31%

Having a job whose

required skill set relates to
their college major

51%
30%
28%
26%

Having a job whose salary will

enable the graduate to pay off
college debt within five years

31%
27%
21%
18%
19%
18%

Having a job requiring

a college degree

15%
16%

Being actively involved

in civic or volunteer activity

8%
17%
19%
13%

Having minimal or no
higher education debt

28%
13%
11%

Overall 2-Year Public 4-Year Private 4-Year

11

THE VALUE EQUATION

When asked the most important skills todays college graduates need, survey respondents largely
picked the foundational soft skills: communications, problem solving, and collaborating with
others (see Figure 4). Only two-year colleges were likely to see their role as providing technical
skills for a job.

FIGURE 4
MOST IMPORTANT SKILLS NEEDED BY GRADUATES TO SUCCEED IN JOB MARKET
83%
75%

Written and oral

communication skills

84%
83%
49%
48%
46%
49%

Making decisions/solving
problems
40%

53%
39%

Collaborating with others

35%
35%
27%

Working with diverse

groups of people

37%
40%
29%
33%

Adaptability/managing
multiple priorities

27%
29%
27%
10%
31%
30%

Analytical/research skills
17%

32%

Technical skills
associated with the job

14%
15%
12%
13%
12%
13%

Planning/organizational
skills

Leading teams

3%
2%
3%
4%

Overall 2-Year Public 4-Year Private 4-Year

12

THE VALUE EQUATION

While those with a college degree do much better in getting a job than those with just a highschool diploma, the unemployment rate for recent college graduates remains higher than their
counterparts from earlier generations. As a result, parents want to know how their sons and
daughters will get the experiences in college needed to snag that first job after graduation.
According to the survey, the No. 1 college experience that leads to a job is an internship. Courses
and majors also matter, respondents said, but not so much a students grade-point average or a
universitys prestige (see Figure 5).

FIGURE 5
EXPERIENCES IN COLLEGE THAT LEAD TO SUCCESS IN THE JOB MARKET
77%
68%
78%
79%

Internships
65%

80%
62%
62%

Relevance of coursework
41%
50%
42%

College major

32%
30%
33%
31%

Employment during college

28%
23%
7%
25%
29%

Extracurricular activities
20%
13%
20%
22%

University rank and prestige

College GPA

18%
17%
17%
19%
18%
22%
16%

Volunteer experience

19%

Overall 2-Year Public 4-Year Private 4-Year

13

THE VALUE EQUATION

College academic programs typically shadow the needs of the job market. Six in 10 respondents
said that they either added or eliminated majors in the past five years based on employment
forecasts for their graduates. Nearly half of those institutions axed majors in professional
programs and the humanities (see Figure 6).

FIGURE 6
MOST COMMONLY ELIMINATED ACADEMIC PROGRAMS BASED ON EMPLOYMENT FORECASTS

53%

47%

29%

Professional Degree

14

Humanities

Social Sciences

18%

18%

Formal Sciences

Natural Sciences

Measuring
Graduates
Introduction
Success

In an era of virtual
education, the real
benefits of traditional,
The fallout from the global financial crisis was
residential education
somewhat slow to reach higher education.
often extend beyond
By the time the housing market crashed in the
the time it takes to
fall of 2008, colleges had already welcomed
amass
120 credits
their freshman class for the academic
year. The
for an to
undergraduate
following year, many colleges were forced
either
degree.
raise their discount rates or lower their
expectations
for enrollment. For the most part, however, college
and university leaders were able to manage the
crisis, assuming that the economy would turn
around, as it had after past downturns.

THE VALUE EQUATION

Until recently, colleges have not felt much need to help launch the careers of new graduates. Many
followed the same playbook year after year a career office, employer fairs, visits from corporate
recruiters, and then, six months or so after commencement, a survey of graduates.
But with the economy stuck in neutral and college prices continuing to rise, prospective
students and their parents are looking more closely at how a college will ease the transition
into the working world. Colleges cant just welcome students for orientation, wish them well at
commencement, and say their work is done. In an era of virtual education, the real benefits of
traditional, residential education often extend beyond the time it takes to amass 120 credits for
an undergraduate degree.
More than 60 percent of respondents in The Chronicle survey described an increase in campus
discussions about job preparation for students, compared to just three years ago. Private fouryear colleges and community colleges reported the largest uptick in interest (see Figure 7).

FIGURE 7
INCREASE IN THE NUMBER OF DISCUSSIONS
ABOUT JOB PREPARATION OF GRADUATES IN THE PAST THREE YEARS

1%

2-Year

33%

53%

13%

1%

Public 4-year

4%

34%

41%

20%

1% 1%

Private 4-Year

32%

49%

17%

1% 3%

Overall

31%

45%

20%

Much less Less Neutral More Much more

16

THE VALUE EQUATION

But how colleges can demonstrate these outcomes to the public remains a heavily debated topic
among higher-education officials. Seven months after he announced the College Scorecard in his
State of the Union address, President Obama hit the road on a two-day campus bus tour through
New York and Pennsylvania where he called for a new ratings system that rewarded colleges for
enrolling more students and getting them to graduation.
While the ratings system still remains under development, government officials have made
it clear that they want employment outcomes a part of the bottom line for measuring college
success. Higher-education officials disagree. In the survey, only 34 percent of college officials
believe they should be required to publish career and salary outcomes data. And only slightly
more, 42 percent, say its reasonable for the public to expect colleges to publish the data even if it is
not a government requirement. Among the different sectors of higher education, private colleges
most objected to publishing the data (see Figure 8).

FIGURE 8
ATTITUDES ON PUBLISHING CAREER OUTCOMES DATA

Required to publish

Expect to publish
49%

43%

42%

42%
37%

34%

35%
28%

Percent who believe it

should be required to
publish outcomes data

Percent who believe it is

reasonable to expect schools to
publish outcomes data

Overall 2-Year Public 4-Year Private 4-Year

17

THE VALUE EQUATION

Whats more, many colleges also are accustomed to checking in only once with graduates about
their employment status: Some 38 percent of institutions survey graduates once, six months after
graduation, about equal to the share who check in yearly (see Figure 9).

FIGURE 9
HOW OFTEN COLLEGES SURVEY GRADUATES ABOUT EMPLOYMENT STATUS

Around every 10 years

Never

2%

6%

11%

Around every 5 years

Around every 3 years

Just once 6 months
after graduation

7%
38%

36%

18

Every year

THE VALUE EQUATION

In open-ended responses in the survey, opponents cited several reasons for their resistance to
publishing career outcomes: Colleges are not solely responsible for employment; inconsistent
reporting and unfair comparisons between institutions; and they are not persuaded that salaries
and employment define success. Wrote one survey respondent: Individuals must build their
networks, must embrace adaptability, and make many, many decisions professionally and
personally that are beyond the influence of four to six years in college.
Job outcomes, of course, are tied largely to graduates financial flexibility, whether they come from
families able to support their job search in those critical first years after graduation or whether
they have undergraduate debt that requires them to forgo certain opportunities. Respondents to the
survey described the minimal debt students should have at graduation in different ways. Some
used debt relative to the time needed to pay it off, while others described it relative to the cost of
attending college. But many used a dollar amount, with most respondents describing an acceptable
amount of student debt somewhere between $5,000 and $25,000 (see Figure 10). For comparison,
the average graduate of the Class of 2014 left with about $33,000 in debt.

FIGURE 10
LEVELS OF ACCEPTABLE DEBT

30%

31%

16%

11%

6%
4%
1%

$0

$1-$1,000

1%

$1,001-$5,000

$5,001-$10,000

$10,001-$25,000 $25,001-$50,000 $50,001-$100,000

Above $100,000

19

The New
Career Services
In the 1970s and 1980s, many colleges eliminated the
name placement from their career planning offices,
some out of fear that it might indicate to parents that
colleges were in the business of matching students to
specific jobs.

Introduction

The fallout from the global financial crisis was

somewhat slow to reach higher education.
By the time the housing market crashed in the
In welcomed
the last five years,
fall of 2008, colleges had already
nearly half
colleges
their freshman class for the academic
year.ofThe
have
increased
following year, many colleges were
forced
to eitherthe
budget
their career
raise their discount rates or lower
theirof
expectations
offices
with 14
percent
for enrollment. For the most part,
however,
college
oftothem
boosting
the
and university leaders were able
manage
the
budgets
byturn
more than
crisis, assuming that the economy
would
a quarter.
around, as it had after past downturns.

THE VALUE EQUATION

But beyond that name change, many career offices remained unchanged over the decades. They
continued to be places in a corner of campus where students arrived in the second semester
of their senior year to search through job openings, update their rsums, or practice their
interviewing skills in time for a job fair.
Since the recession of 2008, however, when both the state of the economy and the value of a
college degree became more important to parents and students in the college search, career
offices and the services they offer are gaining more prominence on campuses.
In the past five years, nearly half of colleges have increased the budget of their career offices,
according to the survey, with 14 percent of them boosting the budgets by more than a quarter
(see Figure 11).

FIGURE 11
CHANGES IN BUDGETS FOR CAREER SERVICES
35%

22%

11%

12%
10%

8%

2%

Reduced >50
Reduced 25-50
Reduced <25
No change
Increased <25
Increased 25-50 Increased >50

percent percent percent percent percent percent

21

THE VALUE EQUATION

Today, more than 60 percent of colleges offer optional career counseling, internships arranged
through the institution, and help for students in developing a post-graduation professional plan.
Twenty percent of institutions require career counseling and another 14 percent mandate basics
of business courses. About half of colleges offer an alumni mentoring program and another 30
percent of respondents said they wish they did (see Figure 12).

FIGURE 12
TYPES OF UNDERGRADUATE CAREER PROGRAMS

21%

Career counseling

Institutionally arranged
internship or coop program

17%

14%

Basic of business course

Supported development
of post-graduation
professional plan

Assigned alumni
mentoring programs

75% 4%

64%

46%

13%

27%

6%

13%

1%
7%

65%

27%

1%
57%

30%

12%

We offer this and it is required

We offer this and it is optional
We do not offer this, but should
We do not offer this and should not
22

THE VALUE EQUATION

The value of a college degree, of course, often pays off over time. As a result, many colleges
increasingly are offering more of their on-campus career services to alumni. Of particular
interest are academic courses offered to current students that alumni can take for professional
development. In recent years, however, college graduates wanting to retool their skills have
turned away from traditional colleges and universities and instead have embraced a new crop
of online and in-person providers, such as Lynda.com, Coursera, edX, and General Assembly.
Most college leaders remain unfamiliar with these new competitors (see Figure 13), according
to the survey, and over a third of college officials said that their institutions shouldnt provide
discounted or free audits of courses to alumni (see Figure 14).

FIGURE 13
COLLEGE LEADERS FAMILIARITY WITH NEW EDUCATION PROVIDERS

84%

Khan Academy
67%

Coursera
58%

iTunes U

58%

edX
48%

Udacity
34%

Lynda.com
20%

Skillshare
11%

Codecademy

9%

General Assemby

Treehouse

3%

23

THE VALUE EQUATION

FIGURE 14
TYPES OF ALUMNI CAREER PROGRAMS

2%

Financial counseling
regarding higher education
debt repayment

21%

Access to campus
career placement
services

Discounted or free auditing

of regular university
or college courses

26%

9%

78%

10% 3%

1%

Assistance with
professional development
(career coaching)

Short courses to enhance

specific technical skills
that are in demand in
the workforce

51%

9%

72%

3%

51%

18%

36%

10%

2%
37%

22%

39%

We offer this and it is required

We offer this and it is optional
We do not offer this, but should
We do not offer this and should not
24

THE VALUE EQUATION

Its clear from the survey that college officials sometimes are struggling with the new demands
placed on career services by students, parents, and employers. Nearly half of respondents said
that the timeline for employer recruiting begins earlier in the academic year than it did five
years ago (see Figure 15). Recruiters want to secure top talent early, one respondent wrote
in the survey. College officials in the survey also said that budget constraints, poor student
participation, and a lack of faculty and administrative buy-in also have hindered their ability
to enhance career services and improve outcomes. We know that students need the help and
support, but they may not, one respondent wrote in the survey. They underestimate how
competitive the process is and how early it starts.

FIGURE 15
THE HIRING TIMELINE FOR STUDENTS TODAY COMPARED TO FIVE YEARS AGO

The process
begins later now
4%

The process begins at

about the same time

53%

43%

The process
begins earlier now

25

Conclusion
Ever since the recession of 2008, colleges have been under pressure from students, parents, and
lawmakers to better prove their value in the face of increasing tuition prices. College leaders,
however, have been pushing back against such efforts under the belief that a college degree serves
multiple purposes and, as a whole, its value cant be measured easily. They largely oppose efforts
to measure the career earnings and job outcomes of their graduates, and particularly dislike
government efforts to mandate such measures.
The results of The Chronicle survey demonstrate that college officials still believe in the value of
a college degree despite its high price. Even as employers complain about college graduates who
come to them unprepared for the job market, college leaders say their job is not to train students
for a specific job, but to provide them the foundational education thats needed to succeed in a
fast-changing economy.
Even so, the survey shows that colleges have been investing more money to expand the offerings
of their career services, but are struggling under the pressure of tight budgets and sometimesapathetic students to provide the full range of programs that they desire. Its in programs related
to career services, however, that campus leaders could continue to focus their efforts and
investments if they want to improve the employment outcomes of their graduates in the coming
years and, ultimately, the value of their degree.

Methodology
The results of The Value Equation: Measuring & Communicating the Return on Investment of
a College Degree are based on responses from vice presidents, deans, and executive directors
at private, not-for-profit four-year, public four-year, and public two-year institutions. Huron
Consulting Group conducted the online survey for The Chronicle. Of those invited, 801 college
officials completed the survey. The data collection took place in November and December 2014.

The Value Equation: Measuring and Communicating the Return on Investment of a College Degree is based on a survey conducted by Huron
Consulting Group, Inc., was written by Jeffrey J. Selingo, contributing editor at The Chronicle of Higher Education, Inc. and is sponsored by
Lynda.com. The Chronicle is fully responsible for the reports editorial content. Copyright 2015.

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