Home Accountability Reviewing the Methodology Behind New ROI Rankings for 4,500 Colleges
Reviewing the Methodology Behind New ROI Rankings for 4,500 Colleges

Reviewing the Methodology Behind New ROI Rankings for 4,500 Colleges

college ROI rankings Boston

I am no fan of the Department of Education’s College Scorecard, primarily because it is incomplete and may be misleading for some metrics. Much of the data is derived from students using Federal Student Aid (FSA) only and some of it is from those who are first-time, full-time students using FSA loans. At APUS, most of our students are part-time, working adults not using FSA to fund their education. I first wrote about the Scorecard in 2016 and reported about others like me who criticized its incomplete data.

Despite the flaws of the Scorecard, I understand why Georgetown University’s Center on Education and the Workforce recently attempted to create a return on investment (ROI) for all colleges using this data. First, it’s the only published source that uses IRS data to match earnings with students who have attended those specific institutions and who received FSA. With access to earnings, institutional costs and debt incurred, the researchers can calculate a rudimentary ROI.

For some institutions, using data from FSA students may be representative of all students. In our case, however, this group represents less than half of our active students. Without having access to IRS data from all students, I do not know if the earnings provided are representative or not. The salary for APUS students 10 years after starting is listed at $62,400 in the Scorecard. I assume that one reason why our number is approximately double the median used in the sample of $32,300 is that most of our students are older than 18 when they start and already working full-time. While this number should normally not fluctuate much, I am concerned about the potential impact of students who enrolled in many different online programs from 2010-14 at APUS and other institutions who had no intention of completing their programs or courses, i.e. so-called “stipend chasers”.  Unless the Department finds a way to parse this number, it is possible that earnings could decrease in the future if these student earnings are included.

Cost is based on the institution’s net price, which is the average cost of attendance (tuition, fees, books and supplies, and living expenses) minus aid received from all sources. Since we keep tuition affordable and provide textbook grants for undergraduates, our average annual cost in the current Scorecard is $10,284. The debt amount used in the study is the median principal loan amount upon entering repayment for the debt cohort of each institution. While the average loan amount cited for APUS is relatively low at $5,500, it would be closer to $0 if all students were included.

APUS proudly serves U.S. military members. In fact, since 2001, we have capped our undergraduate tuition at the semester hour rate reimbursed by the Department of Defense. In addition, we provide a textbook grant to undergraduates and charge very few, nominal fees. As a result of our founding mission and focus on affordability, we know that currently 72% of all of our graduates do not need to incur loans through APUS to pay for their education.

The Georgetown researchers state that their rankings do not account for a number of factors, including: cohort-, location- and occupation-specific effects, along with industry-specific shocks like a downturn in the home-building industry. I noticed the impact of location-specific effects when comparing APUS’s rankings with other West Virginia institutions. Since most of our students do not live in West Virginia, with one of the lowest per capita incomes, our net present value (NPV) is the highest in the state with only one other institution having a 40-year NPV above $1 million.

Median earnings for students were interpolated using six, eight and 10-year reported earnings, and were not inflated beyond year 10. While this methodology is certainly conservative, it effectively handicaps institutions whose students take longer than four years to complete a bachelor’s degree. The researchers recommend that the Scorecard include data on earnings greater than 10 years, specifically median earnings at 15 and 20 years after enrollment — something I would welcome. For institutions primarily awarding less than four-year degrees, the researchers recommend that the College Scorecard include earnings at shorter intervals such as two, three, and four years after entering. This is also a sound recommendation due to the Department’s methodology of excluding any students still enrolled.

Again, I am glad that the Georgetown researchers published this report on college ROI, and especially to see APUS recognized for fulfilling its mission of providing a quality and affordable education. I hope that the Scorecard expands its data to include all college students even though that may take an act of Congress to facilitate. The most valuable feature of this report is that the researchers have attempted to quantify and evaluate on a relative basis, the ROI generated from many of our U.S. colleges and universities. Those colleges with a high ROI deserve some praise, while those with a low ROI need to examine the factors for that ranking.

There will be major changes in the higher education landscape over the next decade. Institutions that survive and thrive will undoubtedly take into account the demand to provide an ROI to their students.



Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In September 2019, Dr. Boston retired as CEO of APEI and retired as APUS President in August 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. For four years from 2009 through 2012, APEI was ranked in Forbes' Top 10 list of America's Best Small Public Companies. During his tenure as president, APUS grew to over 85,000 students, 200 degree and certificate programs, and approximately 100,000 alumni. While serving as APEI CEO and APUS President, Dr. Boston was a board member of APEI, APUS, Hondros College of Nursing, and Fidelis, Inc. Dr. Boston continues to serve as a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), a member of the Board of Overseers of the University of Pennsylvania’s Graduate School of Education, and as a member of the board of New Horizons Worldwide. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. In August 2020, the Board of Trustees of APUS appointed him Trustee Emeritus. In November 2020, the Board of Trustees announced that the APUS School of Business would be renamed the Dr. Wallace E Boston School of Business in recognition of Dr. Boston's service to the university. Dr. Boston lives with his family in Austin, Texas.


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