Is College Still Worth It?

 

college-costs

Just yesterday I received an email from my student loan borrowing service informing me that it will soon be time to begin making payments.  After I took a few minutes to think about how much I was going to be paying, I became curious as to how much my education was worth.

As an intern in the analytics department, I have been working in a program used for visualizing data. I decided to research some data regarding student loans, tuition, and anything else that could be relevant to me as a recent college grad. After some digging, I found a few data visualizations which tell some interesting stories.

 

The 20-Year College ROI by State

The first graphic I found was a map of the United States comparing the 20-Year Net Return on Investment for the average college student by state. By clicking on a state, you can drill down deeper into statistics for individual colleges in that state. Hovering the mouse pointer over a dot next to the college name in the list (sorted in descending order by higher ROI) or the sub map of the state, you can get a tool-tip with more statistics. Using a dropdown menu, you can also look at some other statistics including the 20-year ROI for those with financial aid, the percentage of people who stay in the same state after graduation, the graduation rate, as well as some other relevant statistics.

 

  Here’s the full link: http://public.tableau.com/views/MappingCollegeROI_0/FinancialAidDashboard?:embed=y&:showTabs=y&:display_count=yes

After looking at the visualization, I was able to find a few interesting details. The good news for me was that, as a Penn State graduate, I was set to make a return. Knowing this, I was curious to see what schools would actually cause you to lose money in the long run. According to this visualization, the worst school you can go to for your money is Shaw University in North Carolina with a 20-year ROI of negative $156,000. Interestingly, Alaska as a state has the highest overall ROI while Alabama has the lowest. Alaska really only has one school (University of Alaska), which is a small sample size. Alaska also has the lowest graduation rate at 29%, lower than any other state by 10%.  So considering the low graduation rate, the very cold weather, and how far it is away from everything relevant, you may not want to send your kids there thinking they have the best chance to make a lot of money. If you want your kids to come back home after they leave for college, you should probably make them go to a school in Vermont where only 27% of students stay in the state and have a below average ROI. If you’ve been counting down the days until you have the house to yourself again, you may want to consider getting your children to head to Texas. 84% of students stay in the state while it has an average ROI and a below average cost of graduation. This visualization would have been something great to look at when I was trying to decide where to go to school. It’s highly likely there are a lot of other factors affecting these numbers for each state and there’s no way this visualization tells the whole story, but it is a simple way to compare the costs and benefits of individual colleges.  

 

Tuition Shifts Since 2008

I was also able to find another interesting data visualization from CNBC regarding the changes in tuition in the United States since 2008. This dashboard illustrates spending by each state on higher education and the amount of tuition paid per student in those states. States are shaded in blue according to the percentage of state budget sent on higher education (darker = higher %). By hovering over a state, you can get a line chart and a bar chart comparing higher education budget to tuition over since 2008, and a snapshot of taxpayer money for this year in the form of a pie chart.  

 

Here’s the full link: https://public.tableau.com/views/HigherEdBudgetSqueeze/HigherEdSpending?:embed=y&:retry=yes&:loadOrderID=0&:showTabs=y&:display_count=yes

The biggest thing that stands out is the growth in the gap between tuition and spending per student. This is telling because not only has the amount that students have to pay for school gone up, but the amount of money given to help for college has gone down, increasing the burden on whoever is paying for college. I can speak directly to this as Pennsylvania cut the higher education for public universities by 30% in 2012, as I was entering my sophomore year of school. Penn State was forced to raise tuition, and I had to pay. Pennsylvania’s average tuition has increased 8% and spending per student has gone down 15% since 2012 when I started school. Over this same time period inflation has been slightly less than 6%. This trend exists in the majority of states in the US where the gap between spending on students and tuition is increasing, but Pennsylvania spends the second least of state tax money on secondary education at only 2% of overall budget.

 

There are many dashboards out there examining college education in different ways, such as these visualizations with career and compensation data from PayScale. Which majors and degrees pay the best? What jobs are the most meaningful as compared to how much they pay? How does the ROI of investing in college compare to some historical stock returns?

These were only a few of the more interesting data visualizations that resonated me as I will soon be paying off my student loans. Before I know it, I should probably start saving for my own kid’s education if the cost of college keeps increasing the way it has been.