student return on investment
DESCRIPTION
Assuming most or all of you have a college degree or two and that your degree was the second or third biggest purchase of your life… Was your degree a good value? Do you feel like you got what you paid for? Anyone want a refund??? Are you still deriving benefits from the degree – or has the dividends shrunk over time? Do any of you wish you had shopped around more before attending the institution? What additional questions would you have asked? This presentation examines the rise of students as informed consumers.TRANSCRIPT
The Rise of the Informed Consumer and Student Return on Investment
Todd Bloom, Ph.D.
July 17, 2013
Welcome & OverviewThe Higher Education Marketplace
Overview of Students’ College Attendance Decisions
A Closer Look at Choices and Choice Process
A Closer Look at Information
Student Return on Investment Framework
2
The Higher Education Marketplace
Macro Factors
Demography
Fewer high school graduates nationally
Demographic shifts having different impacts in different parts of the country
Greater racial and ethnic diversity
4
McGee, Jon, (2012). Disruptive Adaptation: The New Market for Higher Education. Eden Prairie, MN: Lawlor Perspective.
Unemployment
Affected all types of families during recession
Continues to influence economic behavior and choices
Family Income
Median income now similar to 1996
Real income declined for all family types
Home Values
Source of financial risk for many families
An anchor to mobility
Family Debt & Savings
Families change in habits during recession (saved more)
Behaviors are changing, however
Student Demographics
5
National Center for Education Statistics. (2013). Projections of Education Statistics to 2021. Washington DC: National Center for Education Statistics.
6
21.6 millionundergrads in U.S. higher ed today.
38% enroll part-time 20% work full-time 38% graduate from 4 year institutions in 4 years
Who is your student?
National Center for Education Statistics. (2013). Projections of Education Statistics to 2021. Washington DC: National Center for Education Statistics.
U.S. Census Bureau. (2012). School Enrollment and Work Status: 2011. Washington, DC: Census Bureau.
National Center for Education Statistics. (2012). Digest of Education Statistics 2011. Washington, DC: National Center for Education Statistics.
National Center for Education Statistics. (2013). Projections of Education Statistics to 2021. Washington DC: National Center for Education Statistics.
Factors that Impact the Higher Education Marketplace
What other macro factors do you believe are dramatically influencing the higher education marketplace and how?
Partner, Discuss, Share
7
Overview of Students’ College Attendance Decisions
9
“A consumer is making a choice to maximize expected utility or minimize expected cost.”
Hal R. Varian,UC Berkeley Economist
people.ischool.berkeley.edu/~hal/Papers/sigir/sigir.html
When making economic decisions…
College Attendance Decisions
Other important factors in a student’s decision to enroll, such as:
10
The decisions of peersFamily expectations
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf
College Attendance Decisions
11
http://www.gallup.com/poll/163268/americans-say-graduates-jobs-status-key-college-choice.aspx
0%
10%
20%
30%
40%
50%
60%
41%
16%
37%32%
22%
40%43%
14%
40%
51%
13%
33%
All respondents<$3,000/mo.$3,000-$7,499/mo.>$7,500/mo.
In your opinion, which of the following is the MOST important factor in choosing which college or university to attend? (general population response)
College Attendance Decisions
12
http://www.gallup.com/poll/163268/americans-say-graduates-jobs-status-key-college-choice.aspx
In your opinion, what amount of tuition is affordable for ONE year of full-time study at an undergraduate college or university, not including room, board, or books?*
No amount of tuition is affordable
<$5,000 $5,000 - <$10,000
$10,000 - <$20,000
$20,000 - <$30,000
$30,000+0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2%
15%
18%
26%
10%
5%3%
20%
9%
17%
8%
3%1%
17%
28% 27%
11%
3%1%
7%
21%
39%
12%
9%
All respondents<$3,000/mo.$3,000-$7,499/mo.>$7,500/mo.
*Responses were open-ended and coded into the ranges
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College Attendance Decisions
Generally speaking, the higher the tuition at a college or university, the better the quality of the education.
5 4 3 2 1Strongly agree Strongly disagree
10% 13% 29% 20% 25%
http://www.gallup.com/poll/163268/americans-say-graduates-jobs-status-key-college-choice.aspx
A Closer Look at Choices and the Choice Process
15
Students have more choices than ever…
15
TRADE SCHOOL?FOR-PROFIT?
LIBERAL ARTS?
ONLINE? BLENDED LEARNING?
MOOC?
IN-STATE?OUT-OF-STATE?
FOUR-YEAR?TWO-YEAR?
PUBLIC?PRIVATE?
Can people have too much choice?
Study #1: Jam StudyResearchers set up two tasting booths for jam – one with 24 different flavors and one with 6
60% of customers went to the booth with 24 choices, and 40% went to the booth with 6 choices
30% of the customers with 6 options bought jam, while only 3% of the customers with 24 options made a purchase
16
Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6), 995-1006.
Can people have too much choice?
Study #2: Essay Study Students in an introductory college-level course were given the option of writing an extra credit essay.
Half the students were given a list of 30 possible topics, the other half a list of 6.
Students with the list of 6 topics were more likely to write the essay than the group given the list of 30.
Students given fewer choices for topics wrote higher quality essays.
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Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6), 995-1006.
Can people have too much choice?
Study #3: Chocolate StudyCustomers chose chocolates either from a display of 30 or 6.
Customers reported greater enjoyment selecting from the display of 30 chocolates.
Later, however, customers who selected from the display of 30 chocolates were more dissatisfied and regretful of their choices than the customers who chose from the display of 6 chocolates.
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Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6), 995-1006.
Can people have too much choice?
Conclusions:
Having extensive choices in a trivial context can be de-motivating (perhaps even more so in the context of significant decisions).
The only context in which people are more comfortable with extensive choice is when they have previous experience with some of the options.
19
Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6), 995-1006.
Can people have too much choice?
Information can add to the problems of choice overload:
Too much
Varying quality
Too little
Trustworthiness
But high quality information can overcome the negatives of choice overload.
20
www.nytimes.com/2010/02/27/your-money/27shortcuts.html?_r=0
A Closer Look at Information
Where do students turn for information about college? People
22
Peers:One study showed that conversations with friends increase the probability of college enrollment. But if a student’s preferred college isn’t popular with peers, the student is less likely to enroll in that particular college.
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf
School Counselors & Admission Officers:College choice can be shaped by data. In one study, providing graduation data increased enrollment by 15% in the college with the higher graduation rate.
www.aei.org/papers/education/k-12/filling-in-the-blanks/
Where do students turn for information about college? Tools
23
Online tools:Financial Aid Shopping Sheet: helps students and families understand college costs
Net Price Calculator: helps students and families estimate their out-of-pocket cost to attend college
College Confidential: helps students and families navigate the admissions process
Payscale: helps students and families investigate the ROI of colleges, degree programs, and professions
Naviance: complete ILP functionality for middle and HS with college and career research, includes transcript sender
Another perspective (Tim Ranzetta)
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1. Completion rates
2. Placement rates
3. Avg starting wages upon completion (with high and low ranges, too)
4. Avg student debt at completion
5. Student loan default rates
6. Student satisfaction based on: Would you recommend this institution's
program to a friend?
7. Job retention (did student still have job 6-12 months after completion?)
http://studentlendinganalytics.typepad.com/student_lending_analytics/2009/10/its-time-for-truth-in-educating
Default Rate – Not Grad Rate?
25 http://www.educationsector.org/sites/default/files/publications/Defaults_CYCT-F_JULY.pdf
Student Return on Investment Framework
Assessing Return on Investment
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What information should students know when making decisions about college?
Assessing Return on Investment
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What do you think?
Please brainstorm in small groups:• What are good measures of student return
on investment? Consider…- Student Body Profile
- Finances & Financial Aid
- Learning Environment
- Non-cognitive Benefits
- Alumni Profile
Assessing Return on Investment
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What factors are most important to the student?
Please discuss in small groups:• Prioritize the factors – rank order• Distribute 100 points among the factors
Report back to whole group
SROI
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Are you interested in continuing this conversation?
Hobsons is interested…
Assembling group of interested institutions in developing an SROI index. Contact me for more information.
Assessing Return on Investment
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What is the student body like?
Four-year graduation rate? 6 year graduation rate?
Average GPA?
Average GPA in major?
Retention rate?
Levels of student engagement?
Percent participating in international study?
Levels of civic engagement?
Assessing Return on Investment
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What is the learning environment like?
How will I be supported?
Will I have an advisor? How often will I meet with him/her
What tools are provided to me to plan for my courses, track my progress, and build a portfolio of performance artifacts?
What is the effectiveness of the career placement service?
Is this a healthy place to learn?
How safe are students on campus?
Does the school value healthcare and lifestyle?
Assessing Return on Investment
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How will I develop non-academic skills?
Will I have opportunities to develop skills like problem-solving and conflict resolution?
Are mentoring and internship programs available?
Are students held accountable for their own outcomes?
What support is available for improving study and social skills?
Assessing Return on Investment
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What are the costs, and what financial aid is available?
Amount of tuition and fees?
Amount of need-based awards?
Amount of non-need-based awards?
Percent of students with loans?
Average student loan amount?
Loan default rate?
Assessing Return on Investment
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What are the alumni like?
What does the first year compensation of graduates look like? In the major I am considering?
Levels of satisfaction?
Percent who go on to graduate study?
Rates of career placement?
Levels of civic engagement?
Rate of alumni giving?
College Attendance Decisions
37
When making decisions about attending college…
What other factors do students consider?
Partner, Discuss, Share