Prospective students increasingly look at outcomes to choose colleges

Range of new tools promise to estimate return on students' investment

More states are creating databases to help college applicants compare the return on investment for different degree programs, but the tools are hampered by limited datasets and regulatory hurdles, the Wall Street Journal reports.

Rising tuition and student debt have focused national attention on the value of a college degree. Many lawmakers and students clamor for more data on post-graduate employment, wages, and debt levels. Anthony Carnevale, an economist who heads Georgetown University’s Center on Education and the Workforce, says it's an example of higher education finally adopting "21st century management practices."

Several states, including North Carolina, Texas, and Minnesota, have created outcomes databases to provide more transparency to students. California will soon join their ranks as well.

Prepare for performance funding 2.0

However, there are practical and regulatory challenges that limit their effectiveness. Consider North Carolina's recently launched online tool, which lets college applicants view employment rates and salary data, by college major, for the state's public institutions. It can show how much a political science graduate from the University of North Carolina at Chapel Hill makes, and how likely they are to be employed or in graduate school—but only for a limited pool of students.

In 2008, Congress passed a law that bars the federal government from creating so called unit-record databases, which match employment data to individual academic records. As a result, state-administered systems rely on data from public institutions, and only track students who work within the state for specific employers—such as those who contribute to state unemployment insurance programs.

Some states are partnering to share data, hoping to better capture out-of-state employment statistics for local institutions. The Obama administration has supported those efforts, as well as launched its own initiative to rate colleges based on access, and outcomes. Those federal ratings might only capture income and employment data for students with federal loans (to comply with the ban on unit-record tracking).

Many colleges are wary of the data-collection efforts. Critics argue they evaluate colleges partially on factors that are outside of their control—such as poor preparedness among students—and fail to capture the non-economic value of a degree. Sarah Flanagan, spokeswoman for the National Association of Independent Colleges and Universities, says "just because you have data points and you can match them doesn’t mean it’s causal."

Related: Public, private colleges divided over Obama's new rankings

However, certain colleges have embraced the databases—and even used them to market to potential students. The University of Akron in Ohio is spending $250,000 on an ad campaign with the tagline "Greatest Lifetime Return on Investment," which highlights the strong earnings of its graduates compared to regional peers (Belkin/Korn, Wall Street Journal [subscription required], 10/31; McCann, "Higher Ed Watch," New America Foundation, 8/22/13; Nelson, Politico, 8/22/13).  

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