How can higher ed promote economic mobility? New data from the Strada Education Foundation suggests a path.
April 15, 2024
For at least the last 40 years, college costs have been rising across the U.S., with tuition annually increasing by 12% on average from 2010 to 2022 alone.
While this is not breaking news, skills shortages along with shocking sticker prices (some students at Vanderbilt University will soon pay $100,000 per year in total expenses) appear to be intensifying scrutiny of the value of college.
More than ever, learners and policymakers are asking: Is college worth the expense? Are graduates learning jobs that pay well? We may now have better answers than before.
Earlier this month, Strada Education Foundation released what it calls the “State Opportunity Index,” ranking U.S. states according to how well their higher education systems advance economic mobility for graduates. While the Index focuses solely on the U.S., it offers a useful methodology and draws conclusions that may be relevant globally.
To measure economic mobility, Strada researchers looked at the return on investment for college degrees.
Researchers with Strada first sought to discover in which states college degrees gave the biggest boost to earnings. Specifically, they looked at the 10-year return on investment in a college degree. Within 10-years of graduation, what percentage of grads earned enough money to at least cover their college expenses?
In every state, most college grads had a positive 10-year ROI. The highest percentages of graduates seeing a positive ROI were in California (79%), Delaware (79%), New York (79%), and the District of Columbia (85%).
Still, the researchers found room for improvement. In some states, the percentage of graduates with a negative ROI appears to be concerningly high: Maine (38%), North Dakota (40%), and Idaho (45%). And in most states by far, associate degrees tend to have lower ROIs than bachelor’s degrees.
Strada urges education leaders to prioritize five areas associated with better career outcomes for graduates.
Perhaps even more usefully, Strada has identified five “priority areas” where higher-education systems could improve. According to Strada, better performance on these priority areas leads to better career outcomes for graduates:
- Clear outcomes—Learners need access to high-quality employment data that can help them make decisions about college, major, and degree.
- Quality Coaching—Colleges and universities should give personalized and timely career coaching to all learners.
- Affordability—Stakeholders, including higher education and government, need to lower or remove cost barriers that exclude many potential learners.
- Work-based learning—More learners need work-based learning opportunities, especially paid internships, which are associated with better career outcomes.
- Employer alignment—Higher education could better ensure that students learn skills and earn credentials valued by labor markets.
Strada has developed—and is openly sharing—sophisticated ways for measuring states’ performance in these areas, along with detailed state-by-state assessments for each.
Perhaps not surprisingly, Strada gives nuanced data strongly suggesting that states across the U.S. could improve in each area. Nationwide, some highlights are that too few students experience paid internships (10% at two-year and 26% at four-year institutions) and too few receive quality career coaching (24% at two-year and 20% at four-year institutions).
Strada’s findings lend support for an ecosystem approach to workforce learning and advancing economic mobility.
Except perhaps for “quality coaching,” Strada’s five priority areas will likely require stakeholders—including employers and governments—to collaborate with colleges and universities as ecosystems, in which multiple agents across sectors have a voice.
Mostly obviously, employers must work with colleges and universities to offer learners work-based learning and to align learning programs with labor market needs. But more complicated collaborations on other priorities are needed too.
For example, Strada claims that all states need to do better at collecting and sharing data: all states need to create or improve longitudinal data systems that provide “a central hub for collecting and distributing education-to-employment (E2E) data.” Building such data systems will likely require that state agencies work with employers and colleges.
Similarly, our own recent research on New England manufacturing suggests that job and career outcomes improve when stakeholders closely collaborate on Strada’s five priority areas.
In New England, many manufacturers are working with colleges and workforce development boards at nearly every stage of program development and execution. Often acting through industry associations, manufacturers have helped colleges to design curriculum, project employment demand, and hire among graduates. In some cases, manufacturers and states, often with federal assistance, are also paying tuition and stipends to attract learners.
Strada plans to update the “State Opportunity Index” annually, both collecting up-to-date data and revising its methodology. Yet already, the Index offers a strong case and roadmap for ensuring college degrees open economic opportunity. Its findings and methods may inspire new approaches to workforce learning globally.
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