ROI Under Scrutiny
The decision to attend a US university is increasingly complicated by financial factors. The cost of education, coupled with student debt and a fluctuating
job market, has prompted a critical assessment: Is a degree from a US university still a worthwhile investment? Public confidence in higher education has decreased due to economic pressures and ideological concerns, mainly among conservative groups. Universities are now working to demonstrate a clear return on investment (ROI) for students—a concept that originated in the business world but is now a key focus in university marketing. The Strada Education Foundation revealed that approximately 70% of recent graduates from public universities can expect a positive ROI within a decade. A positive ROI means that the graduate earns more during that period than a typical high school graduate, exceeding the cost of the degree. These outcomes, however, vary significantly by region.
Regional ROI Variations
The ROI of a university degree differs significantly depending on the region. For instance, in Washington, D.C., 82% of graduates see a positive ROI, whereas in North Dakota, the figure drops to 53%. Preston Cooper of the American Enterprise Institute, as reported by the Associated Press, notes that students are becoming increasingly aware of situations where college does not provide a financial benefit, adding that ROI is now a primary concern for universities, unlike 15 or 20 years ago. This variance highlights the complex interplay of economic conditions, job markets, and educational offerings across different areas. The statistics show a clear need for students to consider the local job market and potential earnings when making educational decisions.
Tuition, Jobs, Policy
In an effort to improve the return on investment, numerous universities have frozen or reduced tuition fees. Some private institutions have cut their advertised prices to better reflect the true costs students pay after accounting for financial aid. Concerns persist on the job market front. According to the Burning Glass Institute, research conducted with Strada reveals that 52% of recent graduates are employed in roles that do not require a degree. Even professions like nursing and education, traditionally seen as secure career paths, show significant numbers of underemployed graduates. Matt Sigelman, president of the Burning Glass Institute, told the Associated Press that no degree programmes or institutions are immune to the employment mismatch. Policy changes include some US states publishing annual reports on university ROI. Texas incorporates ROI data when allocating public funding to community colleges. Furthermore, North Carolina had a state-commissioned study in 2023 that found 93% of public university degrees delivered a positive ROI. Federal policy has also changed, with a recent Republican-backed bill linking university access to federal funding with graduate earnings outcomes, which builds on previous efforts from the Obama administration. The aim is to ensure graduates earn more than non-degree holders.
Adapting to Trends
Universities are adjusting academic programs to align with current job market requirements. Kevin Guskiewicz, president of Michigan State University, mentioned to the Associated Press that he has collaborated with local business leaders to identify essential graduate skills and adapt curricula accordingly. At the University of North Carolina at Chapel Hill, Chancellor Lee Roberts said universities recognize how important earnings data is for students and families. “In uncertain times, students are even more focused—rightly so—on what their job prospects are going to be,” he said, as reported by the Associated Press. These steps reveal the growing recognition among educational institutions that they must adapt to the evolving needs of the workforce to ensure their graduates are prepared for success.
