For many prospective students, college represents an opportunity to secure a job that pays well and, ultimately, a better life for themselves and their families. While this may sound like a lofty ideal, the question of what college is worth and whether it pays off is often a very pragmatic one, especially for community college students—a diverse population with significant financial need.
To effectively recruit and serve these students, a clear, transparent measure of the economic value of education is essential. Students, postsecondary institutions, and policymakers are aligned in this interest. Indeed, a core goal of Building a Talent Strong Texas, the state’s strategic plan for higher education, is the completion of “postsecondary credentials of value” which “propel graduates into lasting, successful careers.”
One measure of the economic value of education is return on investment (ROI), a calculation that subtracts the total costs of college from the expected future returns over time. Students at colleges and in programs with a high, positive ROI earn higher wages which, in time, more than cover the costs of college.
A recent report from the Research Institute at Dallas College calculates and compares the ROI of community colleges in Texas to measure the added value community colleges generate over a high school diploma, and to identify which colleges provide students with the best returns. Using data from the U.S. Department of Education’s College Scorecard, the Research Institute computes ROI at multiple time horizons, from 10 to 40 years after college entry, applying methodology from the Georgetown University Center on Education and the Workforce.
View the full report.