In an attempt to reduce uncertainty over the cost and value of a college education, President Obama released a barrage of data on U.S. colleges in the form of the Education Department’s College Scorecard. While Obama hoped that publicizing information on higher education would help prospective students make informed college choices, he did not take into account the negative effects it would have on some of the country’s top institutions.
The Education Department’s information on the salaries of young graduates has caused many elite liberal arts colleges to come under fire. Administrators are forced to answer difficult questions about the payoffs of their expensive institutions.
For the first time ever, government data indicates that students who attend elite liberal arts colleges do not earn as much money early in their careers as those who attend highly selective research universities. At nearly half of top liberal arts colleges the reported median salary ten years after graduation is below $50,000. Nearly all the best research universities have median salaries of more than $50,000, with roughly a third earning median salaries above $70,000.
According to the College Scorecard, MIT has the highest median salary of all top U.S. educational institutions, including both research universities and liberal arts colleges. The median for MIT graduates stands at roughly $91,600 per year. Research universities similar to MIT claim the next five spots on the list, each with graduates who make over $80,000 per year. Recent graduates from Harvey Mudd, the first liberal arts school on the list, make $78,600 annually.
The median salary of recent Hamilton graduates is just $57,300. Of the institutions studied for the College Scorecard, Hamilton is in the bottom 50% in terms of post-graduate earnings. Nonetheless, Hamilton students tend to make more than most of their NESCAC counterparts within the first 10 years of graduation. Only Tufts and Williams students have higher median salaries, at $67,800 and $58,100 respectively.
At first glance the Education Department’s statistics are worrisome. Not only do recent graduates of elite liberal arts schools appear to be making far less than their counterparts at research universities, but the annual median salaries of liberal arts graduates tends to be less than the annual cost of tuition at these institutions. It will take liberal arts students longer to pay back their loans than it will for graduates of top research universities.
Before attacking liberal arts schools on the basis of the scorecard results, it is important to recognize the College Scorecard’s major flaws.
First, the study does not use information about every student at each institution. In order to calculate the median earnings figures for each school, the Education Department paired information on student aid receipts with federal tax records. In other words, the College Scorecard only accounts for students who received federal loans or grants.
While the number of students who receive federal aid varies from school to school, there are many institutions at which the majority of students do not receive any. For example, only 15 percent of Harvard students received federal aid in 2013. In Harvard’s case, the College Scorecard was measuring the salaries of less than 15 percent of the students who graduated that year.
The College Scorecard is also limited to students working and not enrolled in graduate school. As a result, it does not account for the increase in salary level that usually accompanies advanced degrees.
Finally, the scorecard is especially unhelpful in evaluating schools that offer many different majors, as liberal arts schools do. Liberal arts schools send graduates into a wide variety of both high-paying and low-paying fields. Median earnings figures are skewed in favor of colleges that offer degrees in high paying fields like engineering, business and healthcare.
As the president of the Association of American Colleges and Universities said, the government’s scorecard performs a “huge disservice” for prospective students because it causes them to focus solely on salary instead of on the other benefits of education.