Evaluating the cost of college and future earnings
How did you choose the college you attended? Would you have chosen differently if you could have compared colleges based on graduates' earnings for specific fields of study versus the cost of their education?
It turns out that you can now get this information and more through the College Scorecard, which is published by the U.S. Department of Education.
When the recent update was released, U.S. Secretary of Education Miguel Cardona commented: “The updated and enhanced College Scorecard shines a spotlight on affordability, inclusivity and outcomes, over exclusivity and colleges that leave students without good jobs and with mountains of debt” (tinyurl.com/7hczyahd).
College Scorecard is worth a visit for anyone with future college students in their family circle. Found at collegescorecard.ed.gov, the website offers several choices: You can search by school, by field of study or by selecting certain options, such as “Schools Near Me.”
Choosing “Finance and Financial Management Services” as a field of study produces a long list of 915 colleges. Winnow down these results by using the menu on the left side to select variables, such as location and credential type.
At some point, you'll want to zero in on one college to explore more fully. For example, you'll learn that Georgetown, a private school located in Washington, D.C., has a graduation rate of 94%, which is the “share of students who graduated within 8 years of entering this school for the first time.” Further, Georgetown is listed with an average annual “cost” of $28,909. This figure is important to understand, as it is not the same as the published “sticker price.” Cost is “the average annual net price that a student who receives federal financial aid pays to cover expenses (e.g., tuition, living expenses) to attend a school. Net price is the school's cost of attendance minus any grants and scholarships received.”
Scrolling down further in the listing to “Fields of Study,” you can see that Finance and Financial Management Services turns out to be one of the most popular fields of study at Georgetown, ranked by student size (you can also sort top fields by highest earnings and lowest debt).
Clicking on the field of study brought up more information: Median earnings are $107,054 (the annual earnings three years after graduation of those students who received federal financial aid), median total debt after graduation is $15,500 and the monthly student loan payment is $155. The number of graduates (bachelor's degree) of the program is also listed.
Other tabs include information on typical earnings (which will tell you the percentage of students earning more than a high school graduate, based on six years after a student entered college), the student body demographics, and test scores and acceptance rate.
After reviewing one college, you'll want to compare results to others. I compared Georgetown with a university in my home state, the University of Connecticut, which is a public school located in Storrs. By clicking on the “Finance and Financial Management Services” tags for the listings for Georgetown and the University of
Connecticut, I was able to create a point-by-point comparison (you can compare up to 10 schools at once by specific program or general school listing).
The comparison showed details for median earnings (three years after graduation), median total federal loan debt after graduation and the number of graduates from each program.
The ability to compare schools in this way provides information that simply was not easily available before.
Now, decisions can take into consideration potential outcomes. Not only can you see your cost of attendance (and what you might be paying in loans afterward), but also what you could potentially be earning once you graduate — one way to define the value of a college education.
To truly give college selection some meaning, check out one more datapoint: alumni giving. What could be a better sign of happy graduates? Check out the Grateful Graduates Index created by Forbes at tinyurl.com/5p254hwb. (The index contains only private, not-for-profit institutions with at least 500 students.)
College Scorecard is worth exploring, as is alumni giving. Gone are the days when high school students choose colleges based on geographic location.
Julie Jason, JD, LLM, a personal money manager (Jackson, Grant of Stamford) and author, welcomes your questions/comments (readers@juliejason.com). Her awards include the 2021 Clarion Award, symbolizing excellence in clear, concise communications. Her latest book, a curated collection of Julie’s columns, is “Retire Securely: Insights on Money Management From an Award-Winning Financial Columnist.” To hear Julie speak, visit juliejason.com/events.