Report: Judging Colleges by How Much Recent Graduates Earn Is a...

Higher Education

Report: Judging Colleges by How Much Recent Graduates Earn Is a Misleading Metric

By Jeffrey R. Young     Aug 19, 2019

Report: Judging Colleges by How Much Recent Graduates Earn Is a Misleading Metric

When consumers search the U.S. Department of Education’s College Scorecard, the results that come back are ranked by the average salary students make after attending. That’s just one example of the growing use and prominence of early-career earnings data in evaluating colleges.

But new research argues that the metric can be misleading, and that the amount of money that recent attendees make says more about the demographics of the students than it does about the quality of a college’s educational offerings. Ironically, judging a college based on the income of attendees may penalize the colleges that do the best job at lifting large numbers of students into higher social classes—those that, say, take first-generation college students and get them into well-paying careers, but in fields that are not incredibly lucrative.

That’s the conclusion of a new working paper by three researchers at the College Board, the nonprofit that administers the SAT test, who analyzed the data used in the government’s College Scorecard. “Our findings indicate that consumers can easily draw misleading conclusions about institutional quality when using publicly available earnings data to compare institutions,” the authors wrote.

Put simply, just because a college reports that its graduates earn on average $93,500 (as Georgetown University claims), that doesn’t mean that simply attending the institution will land you a job with that salary. The actual outcome will involve many factors, including what major the student chooses.

The U.S. Education Department's college-comparison tool favors colleges whose students have the highest earnings after attending, by displaying those first in any search results. A new study found that the metric can be misleading.

“If you’re making a decision solely based on the College Scorecard, you’re probably placing too much weight on thinking the college is going to determine what my earnings potential will be,” said one of the paper’s authors, Zachary Mabel, in an interview with EdSurge. “Just throwing something on a website and expecting that people are going to know what’s appropriate in terms of using that in decision-making is doing a disservice to the audience.”

Sandy Baum, a senior fellow at the Urban Institute’s Center on Education Data and Policy, worries that policymakers and parents are focusing too much on how much students will make right of college when making education decisions.

“The value of a college education is far more than just the earnings that you come out with,” she said in an interview. “Many occupations that have high social value don’t make much money,” she added, noting social work as one example. “Do we really want to say their occupation wasn’t worth anything?”

That’s not to say that students and parents should disregard monetary concerns when choosing their college and major, though, she said. “We want to make sure that people who go to college can support themselves afterwards—it’s not that money doesn’t matter.” But looking at the income of students just a year or two out of college may not paint the full picture, she argues. “The earning paths of people are very difficult” to predict.

One way earnings data could be used more effectively, she said, would be to look at the typical earnings of graduates across one major at different colleges. In other words, looking at how engineering majors from three different colleges compare will be much more useful than just looking at the earnings of all graduates.

“Helping people understand how to use the data in an intelligent way is the most important thing,” she said.

Correction: This article original stated that the College Scorecard provides data on the salaries of recent graduates. In fact, the metric used is “salary after attending,” and includes not only graduates but those who have left the institution without a diploma. According to the site, the measure tells “the median earnings of former students who received federal financial aid, at 10 years after entering the school.”


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