Report helps answer the question: Is a college degree worth the cost?

Most people go to college to improve their financial prospects, although there are other benefits to attending a post-secondary institution. But since the average cost of a four-year course has risen to six figures, even at public universities it can be difficult to know if the money is well spent.

A new analysis from HEA Group, a research and consulting firm focused on college access and success, can help answer this question for students and their families. The study compares the average income of former students ten years after enrolling with basic income benchmarks.

The analysis found that a majority of colleges exceed minimum economic measures for their graduates, such as having a median annual income higher than that of a high school graduate without higher education ($32,000, per federal scorecard). facts).

Still, more than 1,000 schools fell below that threshold, even though many of them were for-profit colleges that focused on short-term degrees rather than traditional four-year degrees.

Seeing whether a college’s alumni earn a “reasonable” income, says Michael Itzkowitz, founder and president of the HEA Group, can help people weigh whether to cross certain institutions off their list. For example, someone choosing among comparable colleges can see which institution has produced students with significantly higher incomes.

While income is not necessarily the only criterion to consider when comparing schools, Mr. Itzkowitz said, “It is a very good starting point.”

The report used data from the Ministry of Education College Scorecard to assess the earnings of approximately five million former students who had attended approximately 3,900 higher education institutions, ten years after first enrolling. (The analysis includes data from people who did not complete college.) The report includes public colleges as well as private nonprofit and for-profit schools; the schools can offer non-degree certificates, associate degrees, and bachelor’s degrees.

The analysis found that schools where students earned less than their peers who never went to college tended to be schools that offer non-degree certificates, which can often be completed in 18 months or less, as did for-profit institutions, although the list also includes some public and private nonprofit schools. At 71 percent of for-profit schools, a majority of students earned less than high school graduates 10 years after enrollment, compared with 14 percent of public institutions and 9 percent of private nonprofit schools, Mr. Itzkowitz said.

“College is indeed worth it,” Mr. Itzkowitz said, but paying for it can be “significantly riskier” depending on the type of school you attend or the degrees you seek.

(Another report found that former students of for profit colleges tend to be at greater financial risk than those who attended comparable selective public colleges. These risks include having to take on more debt for higher education, a greater chance of defaulting on student loans, and a lower chance of finding a job.)

Jason Altmire, president and CEO of Career Education Colleges and Universities, a trade group that represents for-profit vocational colleges, said it doesn’t make sense to lump schools that offer primarily short-term certificate programs with colleges that offer four-year degrees. People who want to work in certain professions — such as hairdressing — generally cannot work in the industry unless they obtain a certificate, he said.

Mr. Altmire also said that income data from for-profit certificate schools could be skewed by “gender bias” because the programs had a higher percentage of women, who were more likely than men to work part-time while raising a family, lowering the cost of college . reported median income.

The HEA report also compared colleges’ performance to other benchmarks, such as the federal poverty line ($15,000 annual income for an individual), which is used to determine eligibility for benefits for government programs such as subsidized health insurance and Medicaid. Incomes at the “vast majority” of colleges exceeded this mark, the report found, although 18 — almost all of them for-profit schools offering non-degree programs in beauty or hairstyling — had students with middle incomes below that threshold.

Majors also matter because those in science, technology, engineering and nursing typically lead to significantly higher salaries than majors in the arts or humanities. (Last year the HEA published a separate analysis of the majors in universities who pay the most.)

When comparing post-college earnings, students and families shouldn’t look at the data in a vacuum, says Kristina Dooley, a certified education planner in Hudson, Ohio. Many schools where former students go on to become top earners have programs that focus on health sciences, technology or business, but that may not be what you want to study.

“Use it as one piece of information,” Ms. Dooley said.

She said students should not rule out a college just because it is not at the top of the income list. However, do ask questions, such as whether the career services agency will help set up internships and make connections with alumni to help you find a well-paying job.

Amy S. Jasper, an independent education consultant in Richmond, Virginia, said postgraduate income could be more important for students and families who had to get loans to attend college. “How much debt do they want to incur?” she said. “That is something that needs to be taken into account.”

But, she said, the benefits of college aren’t just financial. “I would like to think that choosing the right school is also about becoming a better person and contributing to the world.”

Here are some questions and answers about study costs:

Which colleges had the highest average incomes?

Big names, like most Ivy League schools, Stanford and the Massachusetts Institute of Technology, are heavily represented at the top of HEA’s analysis. Their students had an average income of at least $90,000 ten years after enrollment. (A handful of for-profit schools, focused on careers like nursing and digital manufacturing, can also be found there.) But the highest-earning colleges on the list? Samuel Merritt University, a school of nursing and health sciences in Oakland, California, and the University of Health Sciences and Pharmacy in St. Louis, each with incomes over $129,000. You can view the data on the HEA website.

How much does university cost?

The average estimated “sticker price” for college—the published costs for tuition, fees, housing, meals, books and supplies, transportation, and personal items—ranges from about $19,000 per year at a two-year community college to about $28,000 for in- students at a public four-year college to nearly $58,000 at a four-year private college, according to 2022-2023 data from the College board. However, some students can pay much less due to financial support.

Are some college programs required to meet income benchmarks?

A federal one rule of ‘paid work’, which aims to make career programs more accountable, is expected to come into effect in July. The new rule, which applies mainly to for-profit schools but also applies to certificate programs at all types of colleges, requires schools to demonstrate that at least half of their graduates earn more than an average high school student in their state and that their graduates affordable student loans. Colleges that miss either benchmark must warn students that the school could lose access to federal financial aid. Schools that fail to meet the same standard twice within three years will no longer be eligible for federal aid programs.