As American’s confidence in higher education declines and the Department of Education (ED) implements its new gainful employment and financial value transparency rules, an event on Tuesday, hosted by the American Enterprise Institute, gathered several panels of experts to discuss how to measure the value of higher education. Doing so has been debated for a number of years because the term “value” can come with different meanings — ranging from a monetary return on investment to a societal good.
Beth Akers, senior fellow at AEI and moderator of the event’s three panels, said the event was meant to discuss the constraints of measuring value in higher education, what methods are used today, and what measuring value in higher education looks like in the context of policymaking.
The first panel touched on a number of issues, including what measuring the value of higher education means. Sarah Turner, a professor of economics, education, and public policy at the University of Virginia, said that value should be seen as a set of measures, since it has different meanings for different audiences — including the student and their family, the government, and the institution itself.
“Value is hard, because it's really a long-term proposition,” Turner said. “Individuals are not the only investors here in college, though. We've got the federal government, and states are big investors, and they want to see value in a value proposition here as well.”
For example, a student may want to know the predictive value of what they would earn by completing a certain program, while the government may want a portfolio of the value of all institutions’ programs, including those that don’t receive federal student aid, and an institution may want to see students finish degrees or credentials that are known to have value — meaning have jobs that have higher earnings in the labor market.
Preston Cooper, senior fellow of the Foundation for Research on Equal Opportunity, noted that measuring value in higher education can be complicated even from a financial standpoint since it’s tough to determine what a student would be able to make if they had not gone to college. And because students borrow and pay different amounts for different programs, that can be difficult to measure as well, Cooper said.
“This counterfactual really matters because different institutions are serving different populations of students who have different earnings potential,” Cooper said. “A wage of $40,000 after they graduate, even if we can measure that, it means different things, depending on what kind of population you're talking about.”
However, Cooper stressed that return on investment (ROI) needs to be at the center when measuring the value of higher education.
“I think this measure of ROI still needs to be at the center of the conversation because if your ROI is below zero, so if you are worse off financially for having enrolled in college, I'm not sure those social benefits [of higher education] are really going to mean very much to you if you are coming up behind from where you started,” Cooper said.
David Troutman, deputy commissioner for academic affairs and innovation at the Texas Higher Education Coordinating Board, added that measuring the value of higher education should also be examined through different demographic lenses.
“We need to be committed to disaggregating all our measures by race, ethnicity, gender, and income, because we'll see those stark differences that exist so that we can be very transparent with what we're trying to achieve with these multiple measures,” Troutman said.
In a separate panel, Scott Pulsipher, president of the Western Governors University (WGU), spoke about WGU’s competency-based educational model, where students earn competency units — the equivalent of credit hours — when they demonstrate their skills through completing assessments. That means students can advance as they progress through a course and don’t need to wait until the end of the semester.
He also noted that WGU’s different programs have different costs. For example, at WGU the cost of a six-month undergraduate term under the College of Information Technology would cost a student $4,265 in tuition, not including fees, while a six-month undergraduate term at WGU’s School of Education would cost them $3,825, not including fees. The pricing model “is relevant to the opportunity” of the program, Pulsipher noted.
The final panel of the AEI event touched on how measuring value in higher education relates to policymaking and the opportunity for bipartisan reform and accountability.
Chance Russell, economist and policy adviser for Rep. Virginia Foxx (R-N.C.), chair of the House Committee on Education and the Workforce, noted that one way to tackle accountability in higher education is through short-term Pell Grant programs. He added that several lawmakers are in support of the Promoting Employment and Lifelong Learning (PELL) Act, which would extend federal Pell Grant eligibility to students enrolled in programs of 150 to 600 clock hours.
Russell said institutional risk-sharing and legislation on college price transparency could improve accountability in higher education.
In September, the College Cost Transparency Initiative — an initiative managed by NASFAA — announced that over 360 institutions across the country have voluntarily committed to follow a common set of principles and standards for the financial aid offers they communicate to undergraduate students. Since then, nearly 100 more institutions have signed on to the initiative
“We talked about measuring value as an important piece, but we have no idea what it costs to go to college,” Russell said. “Students don't know, the federal government doesn't know. We have some measures of average net price. But when you have an average, it doesn't tell you a lot when you have swings of $20,000 to $90,000.”
Panelists also discussed the data available to ED to measure value. Rajeev Darolia, senior adviser of ED’s Office of the Chief Economist, noted that while there have been some advancements, like the College Scorecard, ED does not have as much data on students who don’t receive federal student aid and those that don’t complete their programs.
Darolia encouraged the audience to advocate to ED for more data access for the research community.
“I would encourage everybody here to push the Department of Education, and that's me, but people I work with, to make more data accessible,” Darolia said. “To talk about what data you need to be able to do things like evaluate programs, think about value, think about student success. We really should be pushing on this.”
Publication Date: 10/18/2023