Is our students earning? A new way of measuring how different colleges pay off in the long run.

• Author: Dillon, Erin

The college class of 2011 just graduated into one of the worst job markets in recent history. Twenty-four percent of 2011 grads had a job offer in hand by graduation, compared with 51 percent of students graduating in the pre-recession year of 2007. As these recent college grads move back in with their parents, and as student loan bills come due, many will wonder--was college worth the money?

The short answer is: probably. While studies of past recessions suggest that the unlucky Great Recession grads will do less well economically than those graduating during better times, they are still likely to earn more and have better job prospects than their peers who lack college credentials. The June 2011 unemployment rate for those with only a high school diploma, for example, was 10 percent, as opposed to 4.4 percent for those with a college degree. And earnings for college graduates were 66 percent higher in 2010 than for high school graduates. Moreover, the benefits of a college degree are not just financial: college graduates tend to lead healthier lives, have lower divorce rates, and have children who are better prepared for school. On average, a college degree is a worthwhile, if increasingly expensive, investment.

But the key phrase in that answer is "on average." Graduates of some colleges make a lot more money than graduates of others. It would be helpful if students and parents had information on which was which when choosing colleges, so graduates could avoid the unemployment line the next time the economy implodes. Unfortunately, colleges have been slow to collect earnings data about their graduates--or if they have it, they keep it to themselves. As a result, some people don't realize they've enrolled in the wrong college until it's too late.

Fortunately, new job market information is starting to become available. Some states are using Labor Department data to track the earnings of college graduates who work within the state. The U.S. Department of Education will soon begin evaluating career-focused programs, primarily in for-profit colleges, by comparing graduates' earnings to the size of their student loans. The day is coming when we'll know how much the graduates of every college--possibly even every department or program within a college--earn after they finish school.

And thanks to an innovative online company called Payscale, we can get a sneak preview of how that information will change the way colleges are rated and ranked...