The Return on Investment of Higher Education

Nathan Flyzik

Department of Educational Leadership, Miami University

EDL 660C: Current Trends in Higher Education

Dr. Vicka Bell-Robinson

November 15, 2021

 Introduction

A recent article from Forbes magazine asks the question, “Is college worth it?” (Tretina,

2021) . In our investment and pay-off focused society, this is a question that many students and

families are asking themselves as they begin the college search. The article goes on to list pros

and cons to attaining a college education. The pros are familiar; better wage and benefits, the

requirement of degrees in many entry level positions, and so on (Tretina, 2021). These are

excellent reasons to attend college, but the cons side of the argument is in many ways unfamiliar.

The first point is the notion that many students graduate with debt. Debt is common in college

graduates and in many big life expenses. Other cons include reasons that are not included in the

traditional argument, such as high paying jobs aren’t guaranteed and that it may take some

students longer than four years to graduate (Tretina, 2021). These last two cons are too obvious

or misleading at best, after all, is any high paying job ever guaranteed? This is the discussion that

is happening in popular media and for many folks, at the dinner table. In the following pages, I

will advocate why college is a worthwhile investment for students, families, and society. I intend

to spend a good deal of space discussing the student benefits, then transitioning to how higher

education benefits the families of students and society at large. I also intend for this argument to

not be a one-sided affair; I intend to discuss the positive sides of the investment along with the

deficits in the system that have struck me during my time as a student affairs graduate student.

Overall I seek to prove that higher education, despite the many inequalities and barriers in the

system, is a positive return on investment for multiple stakeholders in society.

 Value for Students

One of the most important reasons in the argument for return on investment in higher

education is the economic return on investment. This is a complicated return to argue, but

generally most evidence points to higher education being an economically sound investment for

students. There is no affirmative amount that is guaranteed by a higher education degree, but

some returns over a lifetime have been reported as large as “$279, 883, to $570,000, and up to

nearly $1 million in one study” (Selingo, 2013, p. 122). Other estimates have been made based

on the possibility of one reaching the top quintile of wealth. For rich students, attending an elite

college boosts their chances of reaching the top quintile of wealth by four, while for poorer

students in low income brackets attending an elite college increases this factor by fourteen

(Tough, 2019). Most things in life do not have a straightforward answer due to the nuances of

different situations, however, this clearly shows that students, rich or poor, overall see an

economic return on their investment of a college degree. If anything, a college degree shields one

from moving down on the social mobility ladder (Tough, 2019).

On the other side of the coin, there are “embodied experiences” at college that may not be

a direct economic benefit for a student but contribute to who they are as a being (Warner, 2020,

p. 31). This is known as return on experience, and focuses on factors of the college journey that

can include connections made, skills developed, and failures and successes experienced that all

contribute to one’s narrative of who they are. Warner (2020) discusses this with his own college

experience: “College is where I met my wife. It is where I was tested as a leader, where I both

succeeded and failed as president of a fraternity. It’s where I took a class with Professor Philip

Graham, who counseled me toward a graduate program two years after I got my degree…” (p.

32). Clearly there are other benefits besides economical gain that often push students to learn to
build a life for themselves over their four years at college. This is also present in the classroom,

where skills of critical thinking, problem solving, and others are formed. There is a common

argument, specifically regarding liberal arts, about how liberal arts majors are unprepared for the

world and should take more realistic majors to fit in with trending industries. However, liberal

arts students often show that other factors such as work ethic, passion, and creativity are all

useful traits for workers to have in a variety of fields (Carlson, 2013). While a degree in political

science may seem ridiculous to those who are focused on economic metrics of major choice,

skills developed in these majors often lead many students to the CEO positions of companies

(Carlson, 2013).

Clearly the investment of higher education is a smart one, but I would like to discuss the

factors that students and families need to consider as they look at institutions. Overall, I truly

believe that there is an economic and experiential return on investment in higher education, but

one should still be careful in selecting their major and where they attend college. Selingo (2013)

points out that not much data exists about “how much a graduate from a particular university

with a specific major earns” and this may be the best data to measure the value of college (p.

122). I would encourage students and family members to think about this when choosing an

institution. For the most part, between the top colleges in the country there really is no difference

(Selingo, 2013). Selingo (2013) uses the example of the University of Pennsylvania and Penn

State, where in two studies researchers found that students with roughly the same academic

abilities earned basically the same income over their lives whether they went to Penn or Penn

State. Another metric that many focus on is major, where majors such as engineering and

computer science earn roughly 50 percent more in their lifetimes than students who study the

humanities (Selingo, 2013, p. 130). For instance, my major at my undergraduate institution was
History, which is currently seeing the worst drop in enrollment since 1980 due to the perceived

earning potential in STEM fields (Flaherty, 2018). I do not believe that this means that students

should all be enrolling in STEM, but I do think that students should be careful about selecting

their major. These factors of tuition cost, major, and the feel of the campus are all equally

important. Having conversations with students that gives equal respect to all of the factors in the

decision is what is needed; it has the power to make the dream of equitable higher education

more realistic.

Recently, such a conversation with a family member about choosing a college and

working through the admission process. This individual had their heart set on a prestigious

school in Boston, but also had the offer to attend their state flagship institution on a full ride

scholarship. Both schools had great programs for what they were looking for academically, but

they gravitated towards the more ‘prestigious’ school in Boston. Prestige is a vague term that

governs much of the rankings in higher education. In the past, the literal meaning in Latin and

French was “illusion” and “conjuring tricks” (Selingo, 2020, p. 56). Often, it is not a category

that is measured accurately, but is instead informed by metrics such as asking other peer

administrators to rank factors of the institution as “distinguished” (Morse & Brooks, 2021). In

this way, it can often be a measure of how one feels about the institution or how good the

institution’s reputation is. This factor plays out in the minds of college students everyday, and

certainly played out in my family member’s. They were willing to go upwards of fifty thousand

dollars in debt rather than take a full ride due to the perceived status of a prestigious university.

Still, the return on investment in college is strong, but one must know how to truly maximize it.

Considering the area of study my family member wanted to pursue, I would absolutely take the

full ride to the state flagship, but I must acknowledge that this is my own informed perspective.
We can provide resources and ask questions to students considering college, but ultimately the

choice does rest in them and the hands of their families.

Value for Families

Higher education is also a valuable investment for families as they look to support their

students in college or attend college themselves. Gregory (2018) discusses how it is valuable for

parents to complete their college degree or support their student who is attending a college. The

three main reasons for this are that financial stability increases, a sense of fulfillment is

developed, and the idea of setting a positive example for children (Gregory, 2018). These are all

excellent reasons for families to support or use higher education, specifically as one thinks about

generational wealth. Returning to the statistics used above, getting a college degree for some

students can increase their lifetime earnings by a factor of fourteen (Tough, 2019). This would

clearly increase financial stability while also securing wealth for future generations of family

lineages. Brownstein (2014) also points out how educational attainment has the ability to

reproduce itself, meaning that if one obtains a college level degree then their children are more

likely to obtain one as well. This would allow for financial stability, but also a future where it is

highly likely that one's children will attain or succeed the level of education that one currently

has. This leads to further financial stability, but also benefits society widely as more of the

population is educated at the post secondary level. While students are crucial actors to view the

argument for the return on investment in higher education, families play an important role in

supporting higher education. Future research should be implemented to see the effects of a

college education on a family, and also how family members interact with the institutions that

their students choose to attend.

 Value for the Public

A common thread in the discussion of higher education is its value for the public and

society at large. The Association of Public and Land-Grant Universities (n.d.), or APLU, notes

that roughly 60% of bachelor degree college students receive their degree from a public college

or university. With a large majority of students receiving a college degree from a public

university, then it should, and does benefit society at large. These benefits materialize in many

ways, such as civic engagement, leadership, and philanthropy. The APLU (n.d.) notes that

college graduates pay roughly $381,000 more in taxes over their lifetime, enriching the towns

they reside in and services they use. This allows their communities to pursue more projects,

reduce barriers, or fix amenities with the funds that are available from college graduates. Public

universities are also providing degrees for areas that society need more workers in such as

“agriculture, computer science, health, education, engineering, biology…” and many more

(APLU, n.d.). These factors make higher education a great return on investment for society from

a sense of civic engagement and financial contribution.

Another return on investment for society at large are the skills that college graduates

leave campus with and the knowledge that is created in university spaces. Some of the most

notable inventions came from colleges and universities; x-rays, DNA fingerprinting, and

antiseptics (CNBC, 2015). While not every student is going to invent a life-changing concept or

device while in higher education, they still leave campus with a skill set that is beneficial

towards society at large. One of these skills is being able to navigate and think in a global society

(Graskamp & Engberg, n.d.). In college, students are exposed to a wide array of people and

subjects that allows them to work in and understand an ever-diversifying world. What

contributes to this adeptness in global settings is students’ understanding of themselves and

others cognitively, interpersonally, and intrapersonally (Graskamp & Engberg, n.d.).

Understanding multiple perspectives and being able to make meaning of one’s own leads to a

society that has the potential to be more productive when facing communal issues. If this is not

the result, colleges and universities still produce students who are aware of who they are and

how they relate to the world around them. In this way, important knowledge and student

development occurs on the campuses of colleges and universities that develop the next

generation of thinkers.

Conclusion

All in all, there is a significant return on investment and experience in higher education.

While there are many problems facing the system of higher education in the United States, this is

not an excuse to adopt a deficit perspective or denounce the college journey. Instead, now is the

time for innovation and big ideas. Higher Education is still a great investment for students, as

they see a large return economically and also experientially over their lifetime. These benefits

also extend to family members, as they can preserve wealth in their family and also become role

models for their own children in regards to advancing education. Finally, higher education

continues to be a valuable investment for the general public, shown in how graduates are more

civically active and give back in terms of community service and the knowledge skills they

provide to an ever-changing world. Despite any shortcomings in the higher education field, we

must continue to prove that higher education is a valuable investment, while guiding students

through conversations about how to best maximize their investment. Overall, the future offers

opportunities to continue the life-changing work of higher education, while welcoming more

students onto college campuses who truly need the benefits they offer.
 References

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