The choice of whether and where to attend college is among the most important investment decisions individuals and families make, yet people know little about how institutions of higher learning compare along important dimensions of quality. This is especially true for the nearly 5,000 colleges granting credentials of two years or fewer, which together graduate nearly 2 million students annually, or about 39 percent of all postsecondary graduates. Moreover, popular rankings of college quality, such as those produced by U.S. News, Forbes, and Money, focus only on a small fraction of the nation’s four-year colleges and tend to reward highly selective institutions over those that contribute the most to student success.
Drawing on a variety of government and private data sources, this report presents a provisional analysis of college value-added with respect to the economic success of the college’s graduates, measured by the incomes graduates earn, the occupations in which they work, and their loan repayment rates. This is not an attempt to measure how much alumni earnings increase compared to forgoing a postsecondary education. Rather, as defined here, a college’s value-added measures the difference
between actual alumni outcomes (like salaries) and predicted outcomes for institutions with similar characteristics and students. Value-added, in this sense, captures the benefits that accrue from both measurable aspects of college quality, such as graduation rates and the market value of the skills a college teaches, as well as unmeasurable “x factors,” like exceptional leadership or teaching, that contribute to student success.