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The Impact Of ROI & Labor Data In Students’ College Decisions
Student anxiety about life after college is growing. This can be attributed to a variety of reasons, including whether their often very expensive and time-consuming education will translate into viable and profitable careers. The desire to know an investment in college will pay off is of particular concern to low-income and first-generation college students who, because of added financial and cultural pressure, may not want high-risk majors that aren’t as likely to translate to career successes.
Parents and students alike find themselves increasingly weighing various concerns, including return on investment (ROI), when it comes to choosing colleges and majors. So, if given sufficient data about how lucrative certain majors might actually turn out to be, would it make a difference to students as they weigh program and institution selections? If not, how can colleges and universities help students achieve better ROI as they enter the workforce?
What Is the Impact of Labor Market Data on Students at Public Colleges?
According to recent studies, few students correctly estimated the salary of the careers they want after graduation. A 2018 Rutgers study, Adjusting Expectations: The Impact of Labor Market Information on How Undergraduates View Majors and Careers, of 5,000 enrolled undergraduates with declared majors, showed salary expectations of college students are generally curated from media and buzz about which careers are “hot.” Particularly for STEM and business careers, these projections may not bear out. But, students who had previously received no earnings information had even higher earnings expectations than students who received some data, with a difference of more than $10,000 in some cases.
For low-income and first-generation students, there were differences between perception and reality as well, although they were slightly less significant than their peers in the study who were neither low-income nor first generation. Students in these groups typically get their information about programs and outcomes from career services, both on campus and online, as opposed to family or friends. Therefore, providing accurate labor market data to institutional resources, like career centers, could positively impact understanding of salaries and job security.
Ultimately, labor market information, even when correlated with job security as opposed to just earnings potential, served as more of a wake-up call than a call to action. Students reported having more realistic expectations of what their future earnings might be but were unlikely to change their choices of majors or careers. It appears ROI presented in this format wasn’t compelling enough for the majority of students to change directions regarding their education plans. “Students’ choice of major is a highly complex process influenced by many factors, and this information on earnings alone is likely to be insufficient to substantially sway students’ decisions,” according to the Rutgers study.
What Is the Impact of Labor Market Data on Community College Students?
Students at community colleges, who are typically disproportionately low income, had an even greater gap in salary and career outcome predictions than their peers at four-year colleges. The National Bureau of Economic Research (NBER) study,
The Effect of Labor Market Information on Community College, concluded: “Less than 40% of a sample of community college students in California rank broad categories of majors accurately in terms of labor market outcomes. However, students believe that salaries are 13% higher than they actually are, on average, and students underestimate the probability of being employed by almost 25%.”
According to the NBER study, students ranked course enjoyment and their ability to get good grades as the primary motivations when choosing majors. While the study did show labor market data has the potential to impact a student’s choice of major, lack of consistent and quality data presented in an appealing way to students makes it currently a less measurable factor than other variables.
The previously cited Rutgers study summarized the possible result of a shortage of labor market information for students: “The downside of having misinformed students that don’t have all adequate data is the chance that they might be led away from a major that better suits their skills and may be more lucrative than they think.”
What Can College Marketers and Admissions Teams Provide to Prospective Students to Help Make ROI-Based Decisions?
Both of the reports referenced in this article address the perceptions and reactions of current college students. Higher education professionals working with prospective students have the unique opportunity to impact career decisions before students begin down specific career paths. Here are three tactics education marketers and admissions teams can employ to help influence education and career decisions and maximize the return of a student’s education investment:
Encourage Students to Research Lower Tuition Costs.
Before settling on a college, university or trade school, students should consider how they can lower the cost of their education. Whether through grants, scholarships, work-study, other tuition assistance programs or a more cost-conscious program of study, if students spend less on tuition, their ROI should improve.
Provide Information on Internships, Additional Training and Alumni Networks.
At National Louis University in Chicago, students are required to complete internships in their fields, or equally beneficial faculty-led capstones, in order to graduate. These kinds of experiences are useful for building professional networks and establishing whether students enjoy the work they may want to pursue after graduation. Connecting with alumni who align with their professional goals is also a good way for students to get a real feel for the careers they are pursuing. These relationships can be cultivated face-to-face or via social media channels.
Help Prospective Students Understand Salary and Job Growth.
Prior to selecting programs, admissions teams and higher education marketers can provide prospective students with accurate salary, job growth and job security information that may help them make informed decisions. The more up-to-date, specific, regional and national data they have on their possible majors, the more likely they may be to make informed choices that could improve their ROI after graduation.
As you create compelling marketing copy and deliver valuable ROI detail to prospective students, it is important to avoid salary and outcome insights that could be construed as promissory. Cite sources, steer clear of guarantees and you’ll avoid potential compliance issues and concerns. A marketing and admissions strategy with pertinent, compelling and accurate data can help prospective students make informed decisions.
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