What Is the Value of a College Degree?

AuthorGlastris, Paul
PositionEditor's Note

A few years ago, the higher education staff at the Bill & Melinda Gates Foundation posed a simple-sounding question: What is the value of a postsecondary education, and how do you measure it? To figure that out, the foundation partnered with the Institute for Higher Education Policy, a D.C. think tank, and empaneled a diverse group of academics, think tank scholars, college presidents, students, government officials, and a couple of journalists (including yours truly). Thus was born the Postsecondary Value Commission.

The group's original intent was to focus on the economic value of a degree or credential from a specific school to individual students. But we quickly realized that there are vast differences between what students of different races, genders, and income groups pay (including via loans) to get a degree, and in what they earn after college. So equity became central to our work.

We then recognized that the same degree from a given college can produce not only different incomes for different students, but also vastly different amounts of wealth, especially between Black and white students. So we added wealth as a key variable.

It then became apparent that the focus on students' economic well-being was too narrow. Governments invest hundreds of billions of dollars annually in our higher education system; what is the return on that investment, and how do you measure it? Overall GDP growth? Additional tax revenues? What about the benefit to the country of colleges preparing students to become active citizens who, through their individual efforts, help solve the equity issues that were our chief concern?

In short, that simple question did not have a simple answer. Still, after two years of meetings, Zoom calls, and hard work from a crack team of researchers--one of whom is the Monthly's own data editor, Robert Kelchen of the University of Tennessee--the commission released a remarkable report this spring containing a package of conceptual tools that I suspect will define for years to come how higher education experts, policy makers, and average citizens approach that question.

My favorite tool is the "value threshold" chart reprinted on this page. It gives precise shape to an intuitive idea: that the long-term economic value of a college education for any individual student can range from "not worth the investment" to "lets me earn a middle-class income" to "allows me to save for a comfortable retirement."

Unfortunately, the federal...

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