Return on Investment (ROI) in Higher Education

Last Updated 10/17/2023

Often refers to evaluating what students will earn professionally based on their investment in an undergraduate or graduate degree, to determine if there is a positive return on their investment. The concept of ROI is that the upfront investment in acquiring the credential is offset by the increased earning potential and career advancement opportunities it provides. Indicators typically are economic and may include obtaining a job (employability), wage level, job mobility, and benefits acquired through employment. Economic ROI is just one measure of ROI in higher education.

Another important ROI is the maturation process students go through during their college experience (research finds that college serves as a capstone course for life by helping students mature and develop socially in order to become well-rounded and productive adults).

New ROI models are under exploration. One proposes a three-way model to measure the value of credentials which include short-term credentials: (1) Economic Value – value ascribed to credentials that directly connect to high-wage good jobs, and/or high-demand jobs. (2) Mobility – value ascribed to credentials that directly connect to academic (educational) and workforce advancement. (3) Engagement – value ascribed to credentials that directly connect to continued postsecondary investment by learners, such as credentials that increase the confidence of learners that future education is indeed for them -- that they can pursue an educational journey and career journey.

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