Does college still pay off?

  @Money August 2, 2013: 4:52 PM ET
college payoff

Michael Crow wants people to see how a school's graduates fare in the job market.

(Money Magazine)

Michael Crow, president of Arizona State University, America's largest public university, answers the question of whether a college education is worth its high cost.

Does college still pay off?

Changes in college funding
Here's how much costs have risen since 2002 -- and how much funding has fallen.
Public colleges Private colleges
Funding per student -23%
Sticker price 36% 22%
Cost after aid 31% 7%
Notes: All data in 2012 dollars. Sticker price is published tuition, fees, and room and board before receiving financial aid. Sources: State Higher Education Executive Officers Association, College Board, Census Bureau

Our calculations and those of economists say the return on investment for a college education, in terms of additional earnings, is about 12% per year over your lifetime. The answer is unequivocally yes.

But a lot of people worry that the math has changed. This generation faces higher tuition and much higher debt.

That's very important. People say, "The system has changed -- and why did it change for me?"

We have had a perfect storm. The recession greatly accelerated a decrease in public investment in higher education -- at least in terms of direct support for schools. Match that with the inability of most schools to control their costs.

And then, while families have always been willing to borrow for college, their wealth has significantly deteriorated. All those things at the same time are a shock, and colleges haven't adjusted. We need to.

Related: How much will college really cost?

Are we pushing too many kids toward college? For in-state students, four years at Arizona State, all expenses included, is about $100,000. It's easily twice that at private schools. There are good jobs that require technical skills but not four years of college.

First, those prices are sticker prices. Our average in-state tuition is $3,800 a year.

Everybody's not being pushed to college. First, we have to get everybody through high school, and we can't even do that yet.

If we could get 40% of the high school grad population up to some level of technical training, that would be fantastic. And then maybe get 40% to the university level. That's what we need based on the job profiles of the future. Everybody doesn't need to go to college. We do need a broad set of career paths.

You say that colleges need to adjust to new economic realities. What's ASU done to control cost?

In our teaching of freshman math, we have found a way to dramatically improve outcomes while reducing our costs over 50%. We've been able to do this with an "adaptive learning" technology -- software that guides students through assignments customized to their learning style. We grew the university by 25,000 students -- didn't expand the faculty -- all by injecting technology.

Related: Get the financial aid you need

To a parent that might sound like an impersonal campus with giant lectures.

It's not giant lectures. The technology is being applied to those classes where it is valuable, where we have an outcome superior to the professor-on-a-stage model. We offer 16,000 individual courses; a large proportion are under 20 people.

Students majoring in the sciences get much of college's payoff. Should parents of English majors worry?

If the college does its job well, your child will emerge as someone capable of learning any new subject. Parents and other people tend to look to the past and think that you need to get a certain kind of degree to get a certain kind of job. But you don't know what the changes are going to be.

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Many state schools have gotten very selective. You say that's a mistake.

There's a belief that a school is better because it accepts fewer people. A public university should be measured only on the quality of its graduates and the impact of those graduates on society. That's it.

But lots of parents want prestige.

If parents are looking for status upon admission, well, that's one thing. We're saying, "Let's look at achievement upon exit."

Can I compare colleges now, based on that information?

It's hard. Most rankings are based on exclusivity. You see some efforts: The Chinese have a measure of world universities based only on outputs. But I think we're a ways away.

What should I be able to see?

You should have access to things like the number of academic honors kids receive. What percentage go on to graduate school? How rapidly are they employed, by field or major? Graduation rates -- but graduation rates by family income.

Do colleges want this data out?

I don't know that they fight against having that information. I think many administrators are focused on overtaking the schools just ahead of them on the status hierarchy. Right now you don't do that based on output but by exclusion.

About graduation rates: Only 57% of ASU students graduate in six years.

If a student goes to ASU and then graduates somewhere else, that number counts them as a non-graduate. We have a calculation that puts us in the mid-60s.

Related: Congress OKs cheaper student loans

If you take only kids from higher-income families, nearly all will graduate. Having a more diverse class -- more kids working while in college, more first-generation college students -- affects graduation rates. Our goal is a 75% graduation rate, the rate for public research universities admitting only the top 10% of a high school class.

What if kids maybe aren't ready for college? Should they take a year off?

I'm not big on delay. Between 17 and 24 is a critical stage in brain development. I might say, "Go to community college for a year."

Even then, kids who are qualified for a four-year school and who go to community colleges don't graduate at a high rate. If your kid wants to go on to a university, he or she should get onto a pathway program.

These programs tell students, "Take certain classes, perform at a certain level, and engage with university advisers." If they do all of that, they'll move to the university automatically.

Are the new free online courses going to change how college works?

They're very powerful for enhancing what we do and lowering costs. But we won't have students sitting at home watching Princeton professors talk on their laptops. That's not an education. There's a science-fiction world where rich kids and brilliant kids actually interact with people called professors, and everybody else just learns from a computer. That would be a social disaster. To top of page

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