A new report from the Georgetown University Center on Education and the Workforce (CEW) examines how the degrees that liberal arts colleges confer have substantial returns on investment (ROI) in the long-term. The report, “ROI of Liberal Arts Colleges: Value Adds Up Over Time,” notes that at a time when the value of liberal arts education is being called into question, it’s important to see the actual monetary return when projected out over several decades.
The report begins with the fact that today, more college students are opting for undergraduate degrees with direct connections to the job market. When the ROI of recent graduates are compared, those who graduated from job-specific programs outperform those who pursued courses of study at a liberal arts college. But when compared 40 years down the line, the median ROI for liberal arts colleges significantly outperforms the median ROI of all colleges.
The report focuses on colleges that primarily offer bachelor’s degrees. It does not include universities known for strong liberal arts curricula. Utilizing data from the U.S. Department of Education’s College Scorecard released in May 2019, researchers found that 40 years after enrollment, students at 210 liberal arts colleges (institutions defined by the Carnegie Classification system as Baccalaureate Colleges: Arts & Sciences Focus) see a median ROI of $918,000, compared to the median ROI of all colleges, which is $723,000. ROI was measured using the net present value (NPV).
“What we know in the data, and it’s coming out over and over again in the last decade, is that combination of training that is your major in a particular area and general education…has the highest long-term performance,” said Dr. Anthony P. Carnevale, lead report author and CEW director. “At 10 years, it doesn’t look that good. There are heating, ventilation and air conditioning certificates that will outperform a lot of bachelor’s degrees just a couple of years after graduation, but 10 years out the B.A. degree will start to outperform all that. By the time you’re 20 and 30 years out, it substantially outperforms.”
This makes particular sense within the U.S. workforce, said Carnevale, because there is a lot of change in terms of careers and industries and the economy is flexible. Over the course of a lifetime, an individual may have multiple changes of employers and occupations.
Dr. Lynn Pasquerella, president of the Association of American Colleges & Universities, who frequently speaks on the importance of sustaining liberal arts education, concurred with the report’s findings. In an increasingly complex and globally interdependent world where there is rapid change, Pasquerella said graduates of such institutions have adaptability, flexibility and are able to innovate.
Carnevale said the reason general skill is valuable tracks back to changes in the economy that began in 1983 when technology began to rapidly automate repetitive tasks and activities.
