New Financial Value Transparency Act Reporting
As the price of higher education increases, there is also increasing public interest to better understand – and quantify, if possible – the return on investment (ROI) for college graduates. Several organizations have sought to analyze various available data to generate estimates of universities’ ROI, including the Georgetown University Center on Education and the Workforce, FREOPP, and even higher education rankings agencies such as U.S. News and the Wall Street Journal. The level of sophistication varies across existing analyses, but in general, these organizations tend to leverage publicly available data to compare the estimated cost of attendance at a given college or university to the estimated average earnings of its graduates for a given credential. Universities are required to report on cost of attendance annually to the federal government via IPEDS reporting, and in recent years, the federal government began making earnings data available for a subset of universities’ graduates via its College Scorecard reports. The income data that is released by the College Scorecard represents salary averages at certain points in time following graduation among students who took out federal loans during the course of their study. Earnings data are derived from tax statements via the IRS. Overall, Northeastern University’s ROI generally appears very strong when compared to our peers, highlighting the value in our global, experiential educational model.
Critiques of existing ROI analyses are quite prevalent, both from within and outside of higher education. As mentioned, publicly available earnings data represents only a portion of graduates from a given institution, not all graduates. Furthermore, some of the College Scorecard data on which these analyses rely is getting a bit old, and has not been updated recently by the federal government. Some ROI models and analyses are incredibly complicated, and liberties can be taken when estimates and assumptions are made, some which call into question the validity of the results. In addition, most analyses seem to suggest that the greatest ROI tends to come from STEM-oriented degrees, with critics suggesting that this type of modeling significantly underestimates the inherent value of programs in the social sciences, humanities, and liberal arts.
Despite these critiques, ROI analyses have continued to grow in popularity among both the general public as well as politicians. The U.S. government has made it a priority to better understand the cost and ROI dynamics across postsecondary institutions. In 2023, Congress passed the new Financial Value Transparency (FVT) Act. FVT requires that institutions now compile and report on cost of attendance and student debt among each and every student and graduate to the federal government. Representatives from UDS, Financial Aid, the Registrar, and Enrollment Management partnered earlier this year to complete an initial round of this reporting for Northeastern University. The effort to compile and submit this data was near herculean, given the volume of data and the complexity of the reporting specifications. Per FVT, the federal government will now join this student cost and debt data to salary and income data reported by US residents to the IRS. The eventual goal of FVT is to build an understanding of which degree programs at each institution produce a reasonable amount of return on investment to graduates, given their debt load. This information will eventually be made public. The FVT dataset could possibly become one of the most comprehensive tools to understand college and university ROI ever created. That said, it is unclear when this information will be made available to institutions or the public, or how quickly this effort will progress, given that much of the Department of Education and its research arm, the Institute of Education Sciences, has been eliminated by the current presidential administration.
Regardless of federal movement towards increased ROI transparency, Northeastern University has always been incredibly forthcoming about the success of our graduates. Our Career Outcomes webpage, published and maintained by UDS, includes the self-reported salaries of graduates of each of our programs and majors. To our knowledge, it is one of the most robust tools of its kind that has been made available by any college or university in the country. We are also transparent about our graduates’ average debt, which is reported annually in our Common Data Set (see section H, Question 5, in Financial Aid). We feel confident that our graduates are well prepared for the workforce and find a great deal of value in the excellent global, experiential, and interdisciplinary education that we offer. This Spring, spurred by our recent FVT reporting, UDS will continue to closely examine our graduates’ debt levels and associated earnings. For more information about FVT or existing higher education ROI analyses, Mindy Anastasia or Rana Glasgal are always happy to connect.