Higher Education's return on investment

The perception that seeking and achieving a higher education degree pays off has driven enrollment for generations of U.S. and international students and resulted in the dramatic growth of colleges and universities in the 20th century. The return on investment was assumed with local, state, and federal government initially contributing a significant proportion of the cost and students/families picking up the remaining, and more recently growing, proportion of the expense.

Enter a time of demographic shifts that have resulted in U.S. institutions relying on surging international enrollment and attracting students from U.S. families who have previously not had the privilege of higher education opportunity and suddenly the return on investment question is front and center. One-third of students attending college today are immigrants or from recently immigrated families. But for these students the economic mobility pay off is delayed for at least 2 to 3 generations from the first family member who pursues a college degree. For students of color from immigrant family backgrounds, the pay off is even slower than for those who are white. The executive director of the Presidents' Alliance on Higher Education warned that these students "are driving enrollment growth" and that it is "in the business interests of higher education institutions, of communities and states, because immigrant-origin students are also helping to drive workforce development."

Enrollment is an obvious contributor to Fitch predicting continued deterioration of the higher education sector. The anticipation future includes "variable enrollment, rising capital needs and continued operating pressures" that will "chip away at more vulnerable higher education institutions." Perceptions of institutional stability are likely to exaggerate enrollment differences, as prospective students consider whether the investment of their time and tuition dollars are worth it. As evidence of the vulnerability of higher education, 16 non-profit institutions closed their doors in 2024.

In the face of one research report indicating that one-quarter of current students regret the decision to go to college, it is critical that differential costs per student and by type of institution be addressed. With taking on debt a common and growing burden, regret has to be replaced by a clear path to ensure return on investment. A task force composed of representatives from 32 states is beginning to outline a plan to bring state and federal efforts together to address the ROI question. The focus of the National Conference of State Legislator's report is the first effort to address national higher education concerns since 2006. Education Department under secretary James Kvaal noted that policy conversations are often in isolation and that the NCSL initiative offers the opportunity to build consensus around "a system that is open to everyone who needs additional skills and credentials, is affordable, and gives everybody a fair opportunity to graduate and go on to a career of their choice." Breaking the monopoly on education pathways by offering faster and more affordable degrees and reimagine accreditation could be part of the approach to achieve both success and improve credibility.

Reports of falling trust in U.S. higher education may not be as pivotal as some (particularly conservative opposition) have asserted. Medical systems, religion, public schools, and TV news have suffered greater losses in public trust than higher education. The meeting of international educators in Japan in November of 2024 includes focus on countering the partisan attacks around the world that focus on undermining educational progress. Addressing the purpose of the International Association of Universities (IAU) meeting, its secretary general Hilligje van't Land said, "We need to explain to society why it is so important to provide high-quality education and foster critical thinking and open up world views to equip students with the ability to connect with different knowledge systems around the world."

In an effort to encourage greater focus on retention and graduation, the U.S. Department of Education recognized 200 institutions with a "student success" designation. Although the process of selection was questioned by some, the fact that recognition is valued is a positive move. The student success recognition served to redefine high performance as serving diverse student populations rather than elite status based on resources or reputation.  Bridging the gap between education and work is likely to be another area that will reap recognition and the Belmont Fast Forward example may be a good benchmark.

Student success is one of three major trends that will influence higher education in 2025. The three trends are 1) focus on student success, 2) AI, and 3) the rise of alternative credentials and flexible learning pathways.

Overt commitment to student success is reflected in the number of staff specifically charged with improving students' experiences and achievement, a function that often falls in the student affairs division of colleges and universities. A survey of 199 student success leaders was largely positive, with almost all believing that the quality of students education was good or excellent and the majority believing that their institutions were effective in supporting student success. While this survey was of staff who have a vested interest in their institutions being perceived positively, the optimism of this group may help to counter the skepticism expressed by dissenters.

While the idea of return on investment is most often focused on preparation for work, the roots of higher education in the 19th and 20th centuries also included preparation for a reasoned and purposeful life beyond employment. Higher education was advocated as adding quality to graduates' overall life and well-being. Steve Mintz' Inside Higher Education essay advocated that "big picture" courses not be forgotten. His admonition also recognized the difficulties with these courses which include lack of faculty expertise to teach them, student preparation for them, and superficiality when big issues are the subject matter.