New Brookings Report Places University Among Top in Nation for Economic Value of Education

April 30, 2015

A new report by the Brookings Metropolitan Policy Program that seeks to measure the contributions made by two- and four-year colleges to the economic outcomes of its graduates places The University of Scranton among the top 50 colleges in the nation and second in Pennsylvania based on its earning scale for alumni at mid-career level. The report calculates a 31 percent earnings increase - or “value-added” - of a Scranton education.

The new report, “Beyond College Rankings: A Value-Added Approach to Assessing Two- and Four- Year Schools” published April 29, uses statistical and mathematical measures to analyze data on economic outcomes of graduates of colleges, after adjusting for the characteristics of colleges’ incoming students and other factors, in order to determine the contributions – or “value” - that the colleges make to their graduates’ eventual economic success.

The report analyzes the average salaries earned by colleges’ alumni 10 years after graduation (earnings value), the average salaries for colleges’ alumni compared to the average salaries earned in the field (occupational earnings power), and the colleges’ student loan repayment rates three years after graduation, and measures each of these outcomes in context of the characteristics of the college and incoming students.

“The advantage of measuring value-added is that it adjusts a school’s rankings based on the type of college and the characteristics of its student body,” said Brookings Fellow Jonathan Rothwell, who co-authored the report. The analysis accounts for benefits that accrue from both measurable aspects of college quality, such as graduation rates, and unmeasurable “x factors,” such as exceptional leadership, teaching, or alumni networks.

The Brookings report assesses University of Scranton graduates have an earnings “value added” of 31 percent. This is the percentage increase in mid-career salary that is above what would be predicted based on student and school characteristics. The University’s score for its alumni earnings places it among the top 50 colleges in the nation and ties it for second place in Pennsylvania. The national average for four-year colleges value added is nine percent.

The report explained that “x-factors” contribute strongly to the high value-added scores of four-year colleges and universities.

The report used median total earnings by college for its alumni working full-time with at least 10 years of experience based on data collected from PayScale.com. According to the report, “mid-career earnings were chosen because they better approximate earnings over the course of one’s working career.”

The Brookings report also noted that for the earnings value added measure, it only considered alumni “with a bachelor’s degree for colleges that primarily award bachelor’s degrees or higher … In this way, the earnings measure is not affected by the probability that alumni go on to earn higher-level degrees from other schools.” Many of the University’s graduates do, however, continue onto post-baccalaureate programs in medicine, health professions and law. Based on the University’s undergraduate class of 2014 post-graduation survey, 37 percent of its graduates were enrolled in post-baccalaureate degree programs.

The report also calculated a colleges’ “occupational earnings power” by analyzing the occupations its graduates enter and their salaries earned using data from LinkedIn compared to the average pay for those occupations based on data from the Bureau of Labor Statistics Occupational Employment Survey. Brookings calculated the University’s occupational earning power at 2.8 percent above the predicted level. The average occupational earning power for all four-year colleges was two percent.

The third value-added metric calculated in the report analyzed the probability of federal student loan repayment within the first three years of graduation. According to the report, “recent graduates at the highest risk of default are those with low salaries and a high debt burden.” Brookings calculated the University’s student loan repayment rate at 4.2 percentage points above the predicted level. The average student loan repayment score for all four-year colleges was 1.6 percent above the predicted level.

According to the Brookings report, “The theory underlying this analysis is that student economic outcomes, such as future salaries, are affected by student characteristics (such as their academic preparation, age, racial or ethnic background, and family income), the type of college (a community college or research university, for example), the location of the college (as in a big city with many jobs compared to a small town), and the qualities of the college. To estimate the college’s qualitative contribution to student outcomes, independent of its type, outcomes for an individual college are predicted based on institutions with similar profiles and locations.”

The detailed report can be viewed at www.brookings.edu/research/reports2/2015/04/29-beyond-college-rankings-rothwell-kulkarni.

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