What is the Purpose of Higher Education?

Mark SchneiderPresident, College Measures

Vice President and Institute Fellow, AIRFebruary 17, 2014

Can You Self-Actualize While Living in Your Mother’s Basement?

Purpose v. Value?• Is it about money or broader outcomes?• How to measure value (even if we restrict ourselves to labor market

outcomes):– Institution vs. Program Level– Time frame:

• Wage data: first year? 5 years? 10?• Other data? Rolling averages?

• Comparisons– Criterion based– Norm based– Individually driven

• Who should assess value? – Government? – Others (not for profits vs. for profit companies)?

Programs with Bachelor’s Graduates Having Lowest and Highest First-Year Earnings, by States

State Lowest First-Year Earnings Highest First-Year Earnings

Arkansas Music Performance $19,808 Engineering $56,655

Colorado Dieticians $24,876 Chemical Engineering $90,099

Florida Drama $19,548 Fire Science $69,756

Tennessee Photography $28,743 Systems Engineering $54,346

Texas Health Services $15,053 Petroleum Engineering

$117,177

Virginia Philosophy$20,442 Petroleum

Engineering$61,517

• Common Theme in lowest first year earnings: Liberal Arts

• Common theme in highest first-year earnings: Engineering

Average Wages after Year 1 and after Year 10:Graduates from Popular Bachelor’s Degree Programs in Texas

Area of Study Time To Degree Wages Year 1 Wages Year 10 Years 1-10 growth

Biology, General 5.30 $23,243 $81,484 251%

Psychology, General 5.24 $23,729 $54,128 128%

Criminal Justice and Corrections 5.56 $28,184 $55,025 95%

Health and Physical Education/Fitness 5.64 $28,818 $58,109 102%

Marketing 5.05 $30,776 $78,133 154%

State wide university bachelors average 5.36 $31,016 $69,055 123%

Business Administration, Management and Operations 5.48 $31,816 $70,911 123%

Multi-/Interdisciplinary Studies, Other 5.63 $32,133 $49,315 53%

Accounting and Related Services 5.70 $34,331 $76,236 122%

Finance and Financial Management Services 5.17 $34,392 $95,920 179%

Management Information Systems and Services 5.57 $34,813 $80,176 130%

For most majors: start low, end low; start high, end high

Debt Servicing as Example of Why Labor Market Outcomes Matter

• Criterion based:– Rule of Thumb: Debt should not exceed first year

earnings – At that level about 11% of gross first year earnings

will go to service debt at current 3.9% rate

Institution name loan Year 1 Wages Year 10 Wages Monthly paymentPercent year 1

wagesPercent year 10

wagesPrairie View A&M University $36,218 $35,890 $62,835 $365 12% 7%The University of Texas at Austin $37,522 $38,713 $98,976 $378 12% 5%

Texas Tech University $30,146 $31,937 $75,477 $304 11% 5%

Texas A&M University-Corpus Christi $30,240 $32,489 $61,279 $305 11% 6%

Texas A&M University $32,234 $35,230 $93,682 $325 11% 4%Texas A&M University-Kingsville $29,101 $31,904 $62,185 $293 11% 6%

Statewide Summary for Universities $28,103 $35,456 $74,142 $283 10% 5%

The University of Texas of the Permian Basin $18,533 $30,042 $58,599 $187 7% 4%The University of Texas at Arlington $23,032 $37,563 $72,491 $232 7% 4%The University of Texas at El Paso $20,432 $33,794 $62,674 $206 7% 4%The University of Texas at Brownsville $18,265 $32,908 $54,536 $184 7% 4%The University of Texas-Pan American $17,882 $35,275 $59,598 $180 6% 4%

Sul Ross State University Rio Grande College $13,012 $30,413 $45,901 $131 5% 3%

Texas A&M University-Texarkana $13,241 $35,578 $67,714 $133 5% 2%

Student Loans vs. Wages: Institution Level

Norm Based

• Compare to Overall State Performance

Institution name loan Year 1 Wages Year 10 Wages Monthly paymentPercent year 1

wagesPercent year 10

wagesPrairie View A&M University $36,218 $35,890 $62,835 $365 12% 7%The University of Texas at Austin $37,522 $38,713 $98,976 $378 12% 5%

Texas Tech University $30,146 $31,937 $75,477 $304 11% 5%

Texas A&M University-Corpus Christi $30,240 $32,489 $61,279 $305 11% 6%

Texas A&M University $32,234 $35,230 $93,682 $325 11% 4%Texas A&M University-Kingsville $29,101 $31,904 $62,185 $293 11% 6%

Statewide Summary for Universities $28,103 $35,456 $74,142 $283 10% 5%

The University of Texas of the Permian Basin $18,533 $30,042 $58,599 $187 7% 4%The University of Texas at Arlington $23,032 $37,563 $72,491 $232 7% 4%The University of Texas at El Paso $20,432 $33,794 $62,674 $206 7% 4%The University of Texas at Brownsville $18,265 $32,908 $54,536 $184 7% 4%The University of Texas-Pan American $17,882 $35,275 $59,598 $180 6% 4%

Sul Ross State University Rio Grande College $13,012 $30,413 $45,901 $131 5% 3%

Texas A&M University-Texarkana $13,241 $35,578 $67,714 $133 5% 2%

Compared to Overall State Performance Level

What about Time?

Area of study loan Wages Year 1 Wages Year 10 Monthly payment percent first year montly for debt

percent year 10 montly for debt

Microbiological Sciences and Immunology

$61,818 $23,285 $74,482 $711 37% 11%

Statistics$52,808 $20,276 $78,845 $608 36% 9%

Medical Basic Sciences$63,546 $26,990 $217,651 $731 33% 4%

Archeology$55,028 $24,095 $61,956 $633 32% 12%

Germanic Languages, Literatures, and Linguistics

$42,156 $22,264 $55,862 $485 26% 10%

Biology, General$43,770 $23,248 $75,911 $504 26% 8%

Classics and Classical Languages, Literatures, and Linguistics

$44,186 $23,633 $50,916 $508 26% 12%

Counseling Psychology$45,280 $25,091 $42,719 $521 25% 15%

Communications Technology/Technician

$38,544 $22,291 $90,800 $444 24% 6%

Philosophy$38,692 $23,476 $54,900 $445 23% 10%

Anthropology$32,295 $19,929 $44,198 $372 22% 10%

Health/Medical Preparatory Programs

$45,486 $28,873 $105,567 $523 22% 6%

Political Science and Government

$35,888 $23,859 $63,214 $413 21% 8%

Disciplinary Focus: What a difference a decade makes

Institution is the wrong level of analysis: Program level differences

Institution name loan Year 1 Wages Year 10 Wages Monthly paymentPercent of first year wages

Percent of Year 10 Wages

Texas Tech University $36,036 $12,438 $52,863 $363 35% 8%

The University of Texas at San Antonio $39,052 $13,804 $43,870 $394 34% 11%

The University of Texas at El Paso $30,025 $11,373 $31,592 $303 32% 11%

Texas A&M University $41,312 $16,939 $38,315 $416 29% 13%

University of Houston-Clear Lake $52,332 $25,461 $50,675 $527 25% 12%

The University of Texas at Austin $38,561 $21,554 $51,201 $389 22% 9%

University of North Texas $35,646 $21,043 $47,408 $359 20% 9%

Statewide for Universities $33,136 $21,166 $46,328 $334 19% 9%

Texas State University $28,483 $23,196 $44,312 $287 15% 8%

The University of Texas at Arlington $22,660 $28,999 $38,689 $228 9% 7%

University of Houston $20,595 $26,397 $52,953 $208 9% 5%

The University of Texas-Pan American $10,542 $18,014 $34,298 $106 7% 4%

Program Level: Anthropology

Institution name Area of Study loan Year 1 Wages Year 10 WagesMonthly payment

Percent of first year wages

Percent of Year 10 Wages

Statewide Summary for Universities Anthropology $33,136 $21,166 $46,328 $334 19% 9%

The University of Texas at Austin Economics $38,914 $33,437 $110,406 $392 14% 4%

Texas Tech University Economics $30,725 $26,461 $96,431 $310 14% 4%

The University of Texas at Dallas Economics $35,553 $34,489 $72,557 $358 12% 6%

The University of Texas at Arlington Economics $30,431 $30,762 $68,591 $307 12% 5%Statewide Summary for Universities Economics $27,035 $31,016 $69,055 $272 11% 5%

University of North Texas Economics $26,367 $30,411 $72,285 $266 10% 4%

Texas A&M University Economics $22,523 $30,525 $112,496 $227 9% 2%Texas A&M University-Commerce Economics $22,786 $31,547 $93,437 $230 9% 3%

University of Houston Economics $25,394 $39,033 $84,796 $256 8% 4%The University of Texas-Pan American Economics $11,303 $51,348 $46,507 $114 3% 3%

Anthropology vs. Economics

Individual “Ratings”

Individual Weighting?

What is the Role of Intermediaries?

Government Role in Assessing the Value of Higher Education

• Federal Government vs. State• Accountability vs. Consumer Choice