How to Plan Your Career Preparation
There's a lot at stake: you don't want to make any mistakes
Frum Jews don’t need to be told that a college degree doesn’t guarantee a lifetime of comfortable income. Because we’re Torah people, we know that each year’s needs are decided by a Higher force, and that earning a living isn’t meant to be our primary focus. We also know that college isn’t for everyone, and that not every college program makes sense for any one of us.
However, some of us - or our children - could possibly benefit from a formal degree or certification program. The problem is figuring out which of our children and then, in which specific program he belongs.
That’s where data can be helpful. As it turns out, the US government - through the Post Secondary Value Commission and the College Scorecard - provides Americans with torrents of delicious data in many flavors. Considering how a post secondary education can involve an investment of many tens of thousands of dollars and years of effort, this is data that you literally can’t afford to ignore.
Let’s see how you can use publicly-available information to get a better understanding of some common educational choices - and to improve your odds of success.
A Word About Statistics
When it comes to averages (and other statistical measures), the thing to remember is that they indicate likely outcomes, but they don’t predict how things will necessarily work out for you. We talk about people “beating the odds” and succeeding where most others fail. That’s real. Anyone who buys a lottery ticket could win just as anyone could be hit by lightening, but the odds are very low. Successful planning involves calmly and objectively assessing your risks and opportunities and making informed decisions that minimize risk and maximize opportunity.
So when we say that 54% of students attending the average US college will face Bad Outcome A, we’re certainly not suggesting that by signing up for school you, too, will face that outcome. Rather, you would be wise to take that number into account and, ideally, attempt to minimize your risk by selecting a school where, say, the average incidence of Bad Outcome A is only 40%.
By the same token, we should be careful not to take one or two success or failure stories (“my brother-in-law and my sister’s classmate were both messed up there”) as statistically significant. Perhaps those were two outliers and their experience was the result of unknown factors (or “luck” as its often described).
Here’s a second thought. The more data we have to work with, the more likely it is that our statistics will accurately represent real-world conditions. The US government has access to a lot of data. And they have the ability to combine and compare data from multiple sources, like college compliance filings, Pell grant applications, and personal tax returns. While they’re careful to obscure information that could reveal personal private information, they also make much of that data publicly available.
Assessing Your College
To get a sense of how good a job colleges do preparing their students for careers, we’re going to look at two numbers: the threshold 0, and completion rates.
The threshold 0 (also described as T0) is designed to describe the real cost of a bachelors degree. That is, the estimated net cumulative cost of tuition and other related expenses in addition to the opportunity costs of not working full time during your student years. They do that using the median earnings for high school graduates in a college’s home state. In other words, the income you could have expected to earn had you not gone to college.
To illustrate, let’s say that the cumulative total cost of a four year bachelors program is $200,000, but the average student can expect to receive Pell grants and scholarships of $80,000. Therefore, the cumulative net total cost of the degree is $120,000. To get the T0, this number is amortized (spread) over ten years, giving us a yearly value of $12,000. We then add the median yearly earnings for high school graduates in that state - let’s say that’s $30,000. Well, $12,000 + $30,000 gives us a yearly T0 value of $42,000.
If your college investment will be worthwhile, you should expect to be earning at least in excess of $42,000 by ten years after you begin your studies. If a large number of a college’s students are earning significantly less than the T0, then you should be concerned about the quality and value of their programs.
A completion rate is the percentage of students who enroll in a college and go on to graduate with a bachelors degree within 150% of the “expected time to completion”. For a school where it’s expected for a bachelors to be earned within four years, 150% would be six years. Completion rates do not take into account students who transfer out and graduate at different institutions.
A school where 80% of its students graduate is probably on the right track. But a college with a 20% completion rate is definitely doing something wrong.
Assessing All Colleges
Before looking at any one school, you really need a sense of how the entire industry is doing. The median earnings relative to Threshold 0 across all 5,877 colleges being measured is $13,909. That means that, among students who attended all US colleges in the system, half are earning $13,909 more than their T0 thresholds. At the same time, 75% of students are earning less than $22,595 above the T0, and 25% earn $2,890 above.
(Note that these numbers aren’t quite accurate - they’re actually averages derived from individual median values - but they’re close enough.)
The average completion rate across all 5,877 colleges is 54.8%. That means that just over 45% of all students who enroll at US colleges fail to graduate. That’s actually a stunning figure. It suggests that a very large proportion of all students give up without earning their degrees! But what about the tens of thousands of dollars and years of work? All gone.
Low completions rates don’t necessarily mean the students failed, but that to some degree, the institution failed. On the one hand, many schools seem to accept students who are unprepared for the challenge of college (colleges do, after all, earn a lot of money for each new enrollment). In other cases they might simply have failed to teach them properly.
If you ran a business that charged thousands of dollars for a product that failed 45% of the time…well, you wouldn’t be running that business for very long, would you?
Looking at Touro College
Now let’s examine a popular choice for many frum Jews: Touro College in New York (within which Lander is a division). Due to greater costs, Touro’s T0 ($41,073) is higher than the national average (which is $34,771). So you’ll require significantly higher later earnings for this to make sense.
Does the average Touro graduate earn those higher salaries? Unfortunately not. As you can see from the school’s Post Secondary Value Commission web page, Touro’s median earnings 10 years after initial enrollment are just $32,098. That’s $8,975 below their T0, which means that the average graduate is actually losing serious money even once he or she does start full-time work.
Diving a bit deeper into the numbers from that page, we can see that the bottom 25% of former Touro students earn only $14,465, which is $26,608 below the T0.
And Touro’s completion rate? Just 47%. Not crazy, but definitely below the national average.
I’ll repeat that those numbers don’t represent each and every Touro student. Some people will “beat the odds” and do very well for themselves. Others might discover that, in the end, their life circumstances don’t require they work. But it’s statistically likely that most students will never fully recover their investment in a Touro education.
Feel free to explore the Post Secondary Value online tool for yourself. You can search by institution or narrow down the results you get by a number of useful measures.
To get a better sense of your career preparation options, you’ll need to also consider quicker certification programs, apprenticeships, and the use of free online learning resources in addition to four-year colleges. We hope to explore some of those approaches in future articles.
One final technical point. “Median” is not the same as “average” (also known as “mean”). An average is the sum total of all the values being measured, divided by the number of values. As an example, if five people weighed 100, 140, 160, 190, and 200 pounds respectively, their total weight would be 790 pounds and the average weight would be 158 pounds (790/5).
The median, on the other hand, is the middle value. That means the value that has exactly the same number of higher as lower values. In our case, the median weight would therefore be 160 pounds.