What—IS—The Value Of Higher Education?

June 2014

It seems like everyone from the local media to the President of our country is talking about the value of attending college, or at least what that value should be.  Interestingly, economic return on investment— “ROI”—has become the almost singular measure of higher education’s value. 

Along those lines, fields with the highest paying jobs on graduation are gauged “better” while those less so are dismissed as worse, or worse yet — wasteful.  That’s one way of looking at things, but it’s a perspective missing a bigger point.

Preparation for a first job out of college and career are important.  But that has never been the central value of education in the U.S. And unlike in the past, sources from the Wall Street Journal to the U.S. Bureau of Labor Statistics suggest that the average American will now change jobs somewhere between seven to eleven times, so it would also be a short-sighted goal.

American higher education started with nine colonial colleges founded from 1636 to 1769.  They were intended to, in simple terms, educate the “whole person.”  Preparation for careers was an outgrowth rather than goal of American higher education.

While that may sound unproductive by contemporary measures, there was a two-fold logic behind the intent of a baccalaureate degree.  Yes, I said baccalaureate degree, not major.  In spite of today’s popular focus on majors, to this day undergraduates earn a baccalaureate; a major is just one part of that education. As a sidebar worth noting, some experts anticipate that majors will soon become an artifact because most jobs in the future don’t yet exist, so there is no way to create majors to suit them. 

As I mentioned earlier, the logic behind a liberal arts definition of higher education is two-fold.  First, it provides an individual with skills ranging from analytical, critical thinking and improved written and oral communication through a foundation in quantitative-based fields such as math and science.  That isn’t limited to four -year degrees; in fact vocational two -year associate degrees require 25 percent of the curriculum to include general education.

And what employer studies tell us is that while businesses certainly look for graduates with the applied knowledge provided through students’ majors, they sort and make hiring decisions by graduates who best articulate these broader skills.  In fact, the resounding message from employers is that graduates need even more of those broad skills and preparation.

From a quantitative perspective, the rewards of higher education for college graduates (its ROI) can be mathematically calculated, and objectively demonstrates that an individual’s investment, particularly if in public higher education, offers an ROI well in excess of common investment alternatives.  Provocatively and counter to many media reports, economists generally agree that return has grown over history and is at an all-time high.

It is also known that the societal benefits of an educated citizenry, which can also be mathematically calculated, is even more substantial and in fact why Americans have throughout history so consistently supported public higher education. 

We all recognize that a higher education degree is a substantial personal investment for students and their families.  But in comparison to other states, North Dakota’s support of public higher education has kept the cost to our students and families relatively low.  The result has been that an exceptionally high number of our young people are college educated; the Lumina Foundation ranks North Dakota number four in the nation.

As reported in respected national publications such as the Economist and Science through local media and university-based studies, North Dakota students subsequently enjoy some of the highest ROI of any colleges and universities in the nation.  Last month the New York Times reported that college graduates earn 98 percent more an hour than people without a degree, and added that it is because of the demand, “If there were more college graduates than the economy needed, the pay gap would shrink.”  In the case of NDSU, a recently reported 9.5 percent ROI (pegged at more than 14 percent in other studies) exceeds public research university peers in most of the country; that value in peer terms is typical for North Dakota’s other public colleges and universities.  When considered in combination with the $7 of statewide economic impact that NDSU returns for every $1 of state support it receives, it’s hard to argue that public higher education in North Dakota isn’t an exceptional investment for both our students and our state.

The trend of defining higher education, even in our two-year degree programs, as simply “job training” seems questionable.  A broad liberal arts education has been the intent and value of public higher education since its inception and is a well-recognized basis of our country’s success.  It yields measurable (and substantial) benefits for graduates.  But it similarly benefits the communities where they live by measures ranging from increased economic productivity and an enhanced tax base, to reduced needs for public services, assistance programs and health care needs, and a more civil and law-abiding citizenry.

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