Last year, we released an analysis that introduced a new way for students and policymakers to evaluate their return on investment (ROI) in higher education. This Price-to-Earnings Premium (PEP) calculated the time it takes students to recoup their postsecondary educational costs based on the earnings premium that the typical student obtains by attending an institution of higher education. And earlier this year, we issued a follow-up report examining the PEP for low-income students at colleges and universities across the country. While these first two papers focused on the outcomes of students who had attended particular schools, it did not provide a nuanced look at how students fared at individual college programs within a school.
Luckily, new program-level data released from the US Department of Education (Department) now allows us to dig below the surface at many institutions across the country to explore what kind of ROI the typical student received from the specific college program from which they graduated. Comparing the earnings premium that students obtain relative to the price they paid to earn their credential allows us to calculate the PEP that individual majors within an institution produce for their graduates. This gives those considering pursuing a postsecondary credential—as well as policymakers, researchers, and taxpayers—more actionable data about where students should be investing their time and money if they hope to increase their economic mobility. It also provides college administrators with concrete information about which programs of study are working well for students, in addition to flagging those that leave them with little to no economic ROI after they complete their credential.