Report: Not Just What You Study but Where That Matters

Two students with degrees in the same major, but from two different public universities in Texas, might earn significantly different amounts in their first year in the workforce. And the institutions that produce the highest-earning graduates are not necessarily the state's highly esteemed flagships.

That's the message Mark Schneider, president of College Measures, a higher-education research organization, attempted to convey at a Texas Higher Education Coordinating Board meeting in late April. He was there to discuss his new study, Higher Education Pays: The Initial Earnings of Graduates of Texas Public Colleges and Universities.

The study examined the median first-year earnings of students in Texas based on the institutions they attended, their programs of study and the levels of education they attained. Schneider found that "the payoff varied considerably from program to program and from institution to institution."

For students who earn bachelor's degrees, for example, there is a nearly $20,000 difference between the institution whose graduates had the lowest median first-year earnings and the institution with the highest. The lowest, at $28,451, was Sul Ross State University in Alpine, which is in a remote location with a weak labor market, Schneider said. The highest, at $48,086, might surprise some: the University of Houston-Clear Lake.

Philip Castille, the president of University of Houston-Victoria, which ranked fourth on the list, was in attendance for Schneider's presentation, and it piqued his interest. "I was really struck that the public is fixated on premier and elite institutions, but the actual best bargains in Texas higher education are regional comprehensive universities."

This appears to hold true even when looking at just one program. For graduates with bachelor's degrees in psychology, for example, the median first-year earnings ranged from a low of $18,516 at Texas A&M University-Central Texas in Killeen to $36,056 at the University of Houston-Downtown.

"If you look at the data," Castille said, "there is no connection at all between the prestige of the institution from which you got your bachelor's degree and the amount of earnings you achieved in your first year after graduation."

Schneider did observe that certain factors particular to elite institutions like the University of Texas at Austin might depress their results in his report. In fact, the median first-year earnings of those with bachelor's degrees from UT-Austin are reported as $38,145 — less than the statewide median of $39,725.

"This is likely the result of a large proportion of their students — likely their most successful ones — choosing to go on to graduate training or to seek employment outside the state," he said. He also noted that many regional campuses serve older students who are further along in their careers and are looking for a bump in existing salary rather than for their first career jobs.

He said this report — which was supported by the Lumina Foundation and used data from the coordinating board, the Texas Workforce Commission and other national sources — is "just the first step on a long journey" that will continue to examine earnings further out beyond graduation. While the conventional wisdom may be that certain programs and degrees may pay off more in the long run, Schneider said, "The fact of the matter is, we don't know."

One interesting finding, given the state's push for more science, technology, engineering and math — or "STEM" — degrees, was that biology majors tend to have noticably low median earnings one year after a bachelor's degree, which prompted Schneider to conclude, "For me, it's not STEM, it's TEM that matters."

Schneider also found that technical associate's degrees were "gems," with significant financial payoffs, as were certificate programs. Academic associate's degrees, meanwhile, were less lucrative; possibly, he said, because most students with those degrees expect to continue on to complete a bachelor's degrees.

Schneider concluded his report with a caution: "We believe that government officials and political leaders should know about the variations in economic payoff of degrees and programs of study — but they need to be careful about using these data in any program of institutional accountability."

But he said members of the public should take the information into account as they make decisions about their higher education — even given his caveats about the data on elite institutions.

"Quite frankly," he told the board, "I personally believe that documenting the success of the regional campuses and how to make them better is the fundamental challenge, because that's where 80 percent of the students go."

Here is Schneider's full report: