President Barack Obama’s recent proposal to improve higher education has reinvigorated conversation about how best to measure the value of a degree from one college compared with another.
Obama wants to rank colleges by how they best serve their students, then by 2018 funnel a larger share of federal dollars to the higher-scoring schools. The U.S. Department of Education, starting in 2015, would evaluate colleges and universities by several measures, including the amount of tuition, how much students owe when they leave and how many default on loans, graduation rates, the percentage of low-income students and the salaries students make after graduating.
Nationally, higher education officials have begun discussing how to value degrees from very different types of universities, public and private. The complexities of that task become readily apparently in comparing Louisiana’s premier private university, Tulane, to its public flagship university, LSU in Baton Rouge.
Both Tulane and LSU usually make the cut in the myriad national lists of four-year universities. Tulane usually ranks much higher than LSU.
But Tulane students graduate with significantly more debt. One year at Tulane costs nearly six times as much as one year at LSU — $47,000 versus $8,000.
The rankings reinforce the idea that quality comes at a price. But is a degree from Tulane really more valuable than one from LSU? That can be hard to measure consistently.
Data from each school shows that a Tulane student graduating with a bachelor of science degree in business management lands a starting salary of about $55,000, while an LSU graduate with the same degree earns $44,200.
After that, the numbers get a little hazy. LSU breaks down their graduates’ starting salaries by major, while Tulane reports average starting salary by department. Either way, it’s tough to say how reliable the numbers are. Most students don’t return earnings surveys sent to them by the schools after graduation, and it’s tricky to determine whether the ones who do are telling the truth.
By the numbers, LSU engineering graduates do better than Tulane graduates. The LSU starting salaries range from a low of $48,500 for construction management to a high of $82,000 for petroleum engineering. On the flipside, Tulane reports that its School of Science and Engineering graduates have an average starting salary of $40,530.
In the liberal arts and humanities, starting pay for LSU graduates ranges from $27,000 for psychology majors to $42,000 for political science students, with the average student earning about $35,700. Tulane reports its liberal arts graduates earn an average of $33,000.
While the earnings numbers remain muddy, it is clear that one of the biggest divides between the schools is student debt. College “scorecards” put together by the federal government show an LSU graduate typically is hit with a student loan payment of $172 per month compared with $227 for a Tulane graduate.
Economists at both schools agree that part of the calculation of choosing one school over another is deciding how much risk, or debt, students are willing to take on compared with what they hope to get out of the college experience.
LSU economist James Richardson says it will be hard for any group to come up with a simple formula to calculate the value of one university compared with another because students have a variety of motives. They enter college under different financial circumstances and they have different expectations.
Some students, Richardson said, start as undergraduates already targeting the potential income they will get from a future second degree, such as in law or medicine. A good measure for them would be to look at how many students get into their law school or medical school of choice and how many are rejected.
Others may choose a school with any eye toward what opportunities it provides for getting their first job, he said.
“If you are talking LSU and Tulane, they are differentiated products,” Richardson said. “You can’t say one is inferior and the other is superior. LSU will always win against Tulane on tuition, but maybe people want to pay for that mystique of being on the Tulane campus. Maybe it’s that as an LSU grad you don’t have those same connections for a first job opportunity that you would have as a graduate from Harvard. Maybe it’s the same thing for Tulane — those opportunities for that first job.”
Tulane economist Doug Harris likewise said no magic formula to grade colleges exists. He added that differences in cost between colleges don’t necessarily reflect a disparity in the quality of instruction.
“An economics course at the University of Louisiana in Lafayette is not going to be all that different from a Tulane economics course. In fact, they are probably using the same textbooks,” Harris said. “But part of paying more is that you are paying for the peer groups and the networks and the important connections that you make that can help you down the line.”
With the many ways to measure a degree’s worth, it seems clear that if Obama’s proposals come together, schools will likely have to show they are reaching a more economically diverse pool of students to continue getting the funding they want from the federal government. They will also have to come up with more compelling arguments spelling out the value they provide.
Michael Bernstein, Tulane’s senior vice president for academic affairs and provost, said he’s concerned that guidelines could place too much of an emphasis on student debt and shortchange less-tangible value measures.
Tulane students generally graduate with between $26,000 and $30,000 in debt, he said. But to compare Tulane with other schools with cheaper tuition, Bernstein said, it’s important to factor in “the quality of the curriculum and the quality of the faculty.”
“Tulane is a nationally ranked research institution,” he said. “Students get to experience working at a high level with research-engaged faculty. Value is not simply measured in dollars and cents. That’s the part of the conversation not really being joined in the president’s remarks. What’s the value of taking an art history class? It’s hard to measure value that way.”
Mary Feduccia, director of LSU’s career services, said a school like LSU, which charges less tuition than its peers, must fight against assumptions that higher costs equals higher quality.
“To me, the question is will my son or daughter get a good job when they graduate? Where will my son or daughter get the most opportunities to help them plan their careers accordingly?” Feduccia said. “Parents can determine value for themselves if they investigate.”
A less-tangible value at LSU, she said, is that it has become “an institution of choice for employers” looking to recruit. Last year, more than 400 organizations conducted roughly 5,000 on-campus interviews with students.
“We teach students how to be successful and get a job. That’s our value,” she said.
The president’s proposal is likely to set up a fight among policymakers, public universities and private institutions over the best way to measure value.
State Commissioner of Higher Education Jim Purcell said increasing access to college while giving schools an incentive to keep costs low is good policy, but one that can’t be fully vetted until the details are hashed out.
Purcell said state schools have a good shot at coming out ahead if Obama’s plans come to fruition.
“Our tuition has always been historically low. We’re 46th in the nation,” he said. “The second factor is looking at what our graduates do. Our public universities have an opportunity to look good.”
On the other hand, Purcell said, Louisiana may fall short nationally on “total means of financing” or in other words, tuition plus state funding to higher education, which has dipped by roughly $690 million here since 2008.
The state Board of Regents, the state’s higher education policy board, ranks Louisiana at 43rd nationally in the level of funding to higher education.
“On one metric, we look great. On another, we may not look so great,” he said.