The College Completion Agenda

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Presentation transcript:

The College Completion Agenda From “Education for Education’s Sake” to Return on Investment and Employment Outcomes Patrick J. Kelly National Center for Higher Education Management Systems

Why ROI and Employment Outcomes? State policymakers are realizing they can’t afford to reach the postsecondary goals they are targeting under “business as usual” scenarios. Beyond the Federal concern about Pell grants and loan repayment, the economic recession has led many state policymakers to heightened awareness of the mismatch between the graduates being produced (and their skills) and employer demand.

Return on Investment

Median Annual Wage Earnings by Level of Education Attained 25 to 64 Year Olds (2010)

State Returns by Source if Each State Produced an Additional 100 Undergraduate Certificates, 100 Associate Degrees, and 100 Bachelor’s Degrees

The Personal and State Returns if Each State Produced an Additional 100 Undergraduate Certificates, 100 Associate Degrees, and 100 Bachelor’s Degrees AL AK AZ AR CA CO CT DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY Avg 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 300,000 600,000 900,000 1,200,000 High Personal Gain, Low State Revenues Gain High Personal Gain, High State Revenues Gain Low Personal Gain, Low State Revenues Gain Low Personal Gain, High State Revenues Gain Additional Annual State Revenues Generated Additional Annual Personal Income Generated

Employment Outcomes

Environmental Pressures Federal Gainful Employment Effective utilization of federal SLDS grants College attainment/completion goals – state retention of graduates and economic returns Increased focus on “credentials of value” – the attainment of credentials of less than two-years in length (primarily) that yield living/competitive wages Meeting employment demand in key areas – e.g. health, education, STEM, trades Increasing need for employment outcomes data to make the case for continued investment (state and federal policymaking environments)

The Data are Simple Employment/Wage Records Institution Records Employed – record in the database (typically excludes self employed, military, and employed out-of-state) Earnings Industry of Employment Region of Employment Employment/Wage Records Data Available Quarterly Completions Level of Award (Certificate, Associates, Bachelor’s Masters, Doctorate, Professional) CIP Code of Award – Field of Study Origin of Student Continued Enrollment Institution Records Data Available by Term Link SSN

Major Questions Answered What percentage of the graduates are employed in-state – by level and type of award? Are the graduates employed in the region in which they graduate? What are their quarterly/annual earnings? What industries are the employed in? (only relevant in a few fields)

How Can We Tell a Story with the Data?

Many Students Re-Enrolled Following Completion Percentage of 2005-06 Completers Who Continued to Enroll the Following Year Certificates (Less than 1 Year) Certificates (1 Year, Less than 2 Years) Associate Degrees

Of Those Who Didn’t Re-Enroll, How Many are Employed in State? Percentage of 2005-06 Completers Who Employed the Following Year Certificates (Less than 1 Year) Certificates (1 Year, Less than 2 Years) Associate Degrees

What are Their Median Annual Wages One Year After Completion? Median Annual Wages of 2005-06 Completers the Following Year Median Annual Wages of Working Adults with Just a High School Diploma ($16,122) Certificates (Less than 1 Year) Certificates (1 Year, Less than 2 Years) Associate Degrees

What are Their Median Annual Wages Five Years After Completion? Median Annual Wages of 2005-06 Completers Five Years After Completion Median Annual Wages of Working Adults with Just a High School Diploma ($16,122) Certificates (Less than 1 Year) Certificates (1 Year, Less than 2 Years) Associate Degrees

Making the Case for the Graduating Cohort of 2005-06 Employed Over the Five Year Period Median Earnings Over Five Years Total Personal Earnings Above a High School Wage ($16,122) Total Additional Earnings Generated Over the Five Years = $438,756,988

Making the Case for the Graduating Cohort of 2005-06 Total Additional Earnings Over Last Five Years = $438,756,988 Additional State Tax Revenues Generated = $68,536,366 Income Tax $37,818,493 Property Tax $8,471,451 Sales Tax $22,246,422 Savings to the State = $25,707,910 Medicaid $20,078,941 Corrections $5,628,969 Total Revenues and Savings to the State = $94,244,276

Median Annual Wages by General Field of Study and Age (United States) (Includes Only Bachelor’s Degree Holders, Not Residents Who Earned Graduate/ Professional Degrees) STEM Health Business and Communications Employment Outcomes Metrics/ UI Data Match Psychology and Social Sciences Liberal Arts Education Age Source: U.S. Census Bureau, 2010 American Community Survey (Public Use Microdata Sample)

Institutional Accountability (Difficult) Small numbers of graduates for many programs It is very difficult to calculate the “value added” by institution – i.e. the likely employment and wages of students had they not completed their college credentials How much time needs to elapse to realize high wages? (particularly for certain programs) Institutions serving large numbers of place-bound students are victims of their local economy (e.g. a part of the state that has low wages relative to other parts of the state) The difficult balance between directing students into programs with competitive wages and providing student choice

Policy Implications **Avoid deep cuts and reverse disinvestment** States must invest in both traditional students and adult/working students to meet demand for postsecondary credentials Each state must improve access and completion rates to meet credential goals Costs vary by institution: assess types of credentials needed and who can produce efficiently All states see significant positive economic returns to meeting credential goals