Choice of Michigan college can make a (million-dollar) difference

Kettering University in Flint, with its close ties to the auto industry and heavy focus on engineering and STEM jobs, has the most bang for the buck of Michigan’s two- and four-year colleges, according to a Georgetown University study. (Shutterstock photo)

Which Michigan campus you attend can make a million-dollar difference by the time you retire, according to a new study.

A Georgetown University analysis of federal data ranking 4,500 schools nationwide found startling differences in return on investment among campuses, and suggests some community colleges provide as much bang for the buck as some four-year universities, at least in the shorter term.

The study results represent a first stab at estimating the lifetime return on investment (ROI) for students at higher education institutions across the country, and has some severe limitations. Still, the analysis, based on federal College Scorecard data, sheds broad-stroke light on the financial payoff of college, and the earnings differential among various schools. 

Among Michigan’s four-year colleges, tiny Kuyper College, based in Grand Rapids with an enrollment of 200, has about a third of the return on investment of Kettering University, an engineering powerhouse in Flint with close ties to the auto industry.

“Kettering University is a jewel in American higher education,” said Kettering President Robert McMahan. “We have been referred to as the West Point of industry, and our alumni are some of the most successful corporate leaders in the country.”

The University of Michigan and Michigan State are near the top in return on investment, as are the business-oriented private schools Lawrence Technological University in Southfield and Cleary University in Howell.

 

Michigan lags the majority of states in college attainment rates, with fewer than 30 percent of adults holding at least a bachelor’s degree. In Minnesota, for example, 35 percent of adults have a bachelor’s degree or higher.

One reason could be cost. Tuition at Michigan’s public universities is higher than in most states, possibly because state support of public universities has declined. Also, Michigan is notably stingy with college financial aid for aspiring students. Michigan college student debt has increased $10,000 in the past decade.

The result: Michigan families pay an average of 69 percent of the cost at public universities, the sixth-highest rate in the nation. Illinois families, by comparison, pay 32 percent of the cost at public universities.

That cost has an impact on enrollment. In rural Michigan, students enroll in college at a lower rate than in suburban parts of the state, in part because of fear of accruing debt without financial benefit.

The Georgetown study “absolutely destroys the case that college loans are a bad investment,” said Lou Glazer, president of the Ann Arbor-based think tank, Michigan Future and a strong proponent of students seeking a college degree. Those who enroll in college “have an enormous advantage” over those who don’t, Glazer said.

 

The Georgetown study did not examine the paycheck premium for a college degree over a high school diploma, but other studies have found that a person with a bachelor’s degree earns on average $1 million more over the course of their career than the average high school grad.

Among the findings in the study:

  • Community colleges provide a bigger bang for the buck over the first 10 years after enrollment than four-year universities. That’s because community colleges cost less, and because students attending community college full-time typically join the workforce in two years, instead of after four years for university students. At 10 years after enrollment, 21 of the top 25 Michigan campuses for highest return on investment were community colleges.
  • At 40 years after enrollment, though, the top 30 institutions for return on investment were all four-year schools, led by Kettering and Michigan Tech University in Houghton. The top community college for lifetime ROI was Schoolcraft College in Livonia.
  • Kettering was tops in Michigan for 40-year ROI, and 32nd in the nation, above Princeton and Notre Dame. The top three in the country were pharmacy schools, followed by Massachusetts Institute of Technology and Stanford University.

Schoolcraft, with connections to auto suppliers, offers a bigger bang for the buck ($769,000) than some four-year campuses, including Northern Michigan University in Marquette ($738,000).

Schoolcraft has an enrollment of 17,000, and large programs in nursing, business, criminal justice engineering and culinary sciences. “We are very proud of the programs we have,” said Van Nguyen, executive director of marketing and communications for the school. “We are a hidden gem people don’t know about.”

 

Northern Michigan spokesman Derek Hall explained one reason for the school’s low ROI figure is that, despite being a four-year public university, one in five students at NMU earns a certificate or associate’s degree – programs the school offers to serve the isolated region of the state where the campus is located.

“We are just as proud of our top-notch truck driving certificate as we are our outstanding pre-med program,” said Fritz Erickson, NMU president. “If there is a need in our community or region, we will do it.”

The Georgetown study offers a handy comparison between colleges, but its 40-year earnings figures are conservative. For example, federal earnings data currently stops at 10 years after a student first enrolls at college, so the analysis assumes individuals continue to earn that salary for the next 30 years. 

In addition, the data includes all students who enroll at a college and doesn’t distinguish between those who earn a degree (and thus likely earn more) and those who drop out. Thus, schools with higher dropout rates have lower average return on investment.

Also, the earnings figures are in today’s dollars, and do not assume inflation or raises.

In her first State of the State address in February, Gov. Gretchen Whitmer set a goal or having 60 percent of Michigan adults with a post-high school credential by 2030 (that figure is now 43 percent).  She’s advocated efforts to increase enrollment in college and skilled trades training, and pushed to make community college or two years at public universities debt-free – a plan that has yet to gain traction in the Legislature.

Study authors were not available for comment. But Michigan Future’s Glazer said the key takeaway of the analysis for him is that despite rising student loan debt, college is still a good investment.

“Everyone who writes those stories (about rising college debt) went to college and send their kids to college,” Glazer said. “The reason why wages are higher for people with four-year degrees is because there is more demand than supply.”

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Comments

Matt
Tue, 12/10/2019 - 8:34am

A number one nominee for Bridge's dumbest article of the year! Gives little to no acknowledgement that it really isn't about the school one attends but it's the major one picks , abilities signified and the career that that major points the graduate into. Why does Kuyper college "score" so low in this "study"? Duh …. maybe because its graduates choose to and predominately go to work in churches and other non-profit ministry type occupations??? Why does MI Tech "score" fairly high? Couldn't be because its big focus is engineering, and engineers start typically around $60k yr., could it? In the left's (typical Bridge writers) hyper fixation that everyone is "equal" and must be pushed to get a four year degree, they just can't acknowledge that not all people have the same aptitudes, inclinations and abilities and the majors therefore careers (and relative pay) people choose flow directly from these factors. If the abilities signified by your degree aren't in high demand your initial pay will reflect this. A random 4 (or 2) year degree isn't going to magically change this fact.

Bones
Tue, 12/10/2019 - 11:03am

There goes Matt, ignoring that A) some form of a higher degree has become a pre-requisite for pretty much any job that isn't a trade and pays above minimum wage, B) not everyone can be, should be, or wants to be an engineer and C) if they all went into engineering, there would be a massive glut to drive down wages in the field (much like the current law school grad over abundance).

It must have been nice to make a living as white man with no education at a time when everyone else was excluded from good paying jobs; times have changed and the illusory world you inhabited has been killed by the corpulent greed and self-serving short-sightedness of your generation.

Also, stop calling everything you don't like (or understand) the Left. Take it from an actual socialist: The Bridge has, at best, called tepidly for mild redistributive policies. That's not socialism, that's just sensible liberal economic policy, which can keep this teetering, unsustainable system stable for a lot longer than the idiotic Austrian trash you and your cohort of Randian dunces are peddling

Steve Williams
Tue, 12/10/2019 - 12:39pm

I don't know Bones, but he should reread his post. The lack of civility and resort to ad hominem attacks turns me off and I suspect many others. He damages any argument he makes by invoking this technique. Let's assume that we are in a market of ideas and he is a salesman for the socialist perspective. I can't wait to deal with a salesman who is insulting and angry.

Bones
Tue, 12/10/2019 - 5:16pm

You haven't been witness to his nonstop lies and misrepresentations. And yes, I am an angry salesman; I quite frankly don't understand how everyone under the age of 65 isn't furious about the existing state of play, from the trash policies that strangle school funding at a municipal level to the 40 year scam of global neoliberalism. Chide me if you'd like for pointing out that we're barreling toward ecological suicide just ghouls like Betsy DeVos can buy her 11th yacht; calm argumentation has achieved very little, so you'll forgive us when we stop cowing to civility

John Q. Public
Wed, 12/11/2019 - 12:20pm

"He damages any argument he makes by invoking this technique. " Only to the intellectually lazy. Arguments stand on the merits of what they say, not the tone in which they are delivered. Though I understand your point because it underscores how our society is driven by emotion instead of rational thinking, I hope I never succumb to the notion that a cogent argument lacks merit because I don't care for the manner in which it is made.

"(C)alm argumentation has achieved very little, so you'll forgive us when we stop cowing to civility." Agreed. Entrenched power is what it is because it doesn't play nicely. It scoffs at those who do. If you want power you have to take it.

EB
Tue, 12/10/2019 - 10:13am

Kettering & Michigan Tech. have a high percentage of STEM, particularly engineering students. I would think that engineering graduates all have good ROI, regardless of where they studied.

STEM is the key.

Do social science majors ever reach a positive ROI?

Steve Williams
Tue, 12/10/2019 - 10:42am

Matt is right on the money regarding how Bridge could improve its journalism. It is also important to note that a large study found that a very substantial number of college graduates did not improve critical thinking skills after 2 years (45%) and even 4 years (36%). So, if your critical thinking skills are not improved beyond what they were at high school graduation, what should the return on a college degree be for those students?

XYZDetroit
Tue, 12/10/2019 - 11:00am

Because that's what education is all about: $ earned for $ "invested." Don't waste time or $ reading history, literature, philosophy, etc. And your major should be where the $ is.
It's a genuine problem that the well rounded liberal arts education is endangered because of economics and the crushing debt it creates for so many, and that we risk having a tech-smart but human-stupid society as a result. But reducing the issue to sheer dollars-out/future-dollars-in seems to be pretty vapid and thought-free journalism -- on the order of those "best cities in America" stories that rank places high on the basis of low taxes made possible because of no frivolous spending on things like libraries and other community services.

Daniel Romej
Tue, 12/10/2019 - 11:23am

How did Walsh College do?

LLA
Tue, 12/10/2019 - 2:02pm

When looking at the ROI on public four-year institutions, it's interesting to see WMU start out near the bottom at #13 out of 15 at the 10-yr. mark, but it then jumps up to #7 after 20-yrs. and #6 after 40-yrs. Big jump!

blueMI
Tue, 12/10/2019 - 4:11pm

I only skimmed the article (and searched on several strings "cost", "living"...) but any article which looks at only one side of the income statement -- income -- won't reveal much about expenses and therefore about net income.

All of these graduates are spread out over areas with different costs of living. For example: Ann Arbor and Austin are pretty close in costs, whilst Berkeley and Cambridge are both around 35% higher than AA. If you don't include this radically higher cost of living you will arrive at a conclusion which is very flawed.

Anonymous
Tue, 12/10/2019 - 4:38pm

One of the biggest drivers of college costs is the easy loan money from the federal government. The more loan funds available, the more the students take, the more the colleges charge, the more college administrative staff and salaries grow - and finally the more college debt is loaded on our kids. Want to see some efficiency? Turn off the spigot - completely. Same would apply to health care. If we all paid without backup - watch prices drop and efficiency click in.

Bones
Tue, 12/10/2019 - 5:17pm

That's a cool way to further entrench the new aristocracy and leave the poor to die of easily preventable conditions

Jennifer Klingler
Tue, 12/10/2019 - 6:08pm

Interesting article...but where is Delta College in the list of community colleges?

Michigan Observer
Wed, 12/11/2019 - 10:56pm

Unfortunately, Mr Glazer's statement: "Study authors were not available for comment. But Michigan Future’s Glazer said the key takeaway of the analysis for him is that despite rising student loan debt, college is still a good investment."is not very meaningful. Much depends on the major chosen. A degree in the STEM fields from a less prestigious school is much more valuable than a sociology degree from a more selective institution.