NGPF Podcast: Georgetown's Martin Van Der Werf on the ROI of a college education

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Dec 13, 2019
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Paying for College, Podcasts, Research, Student Loans

I had a great conversation with Martin Van Der Werf from Georgetown's Center on Education and the Workforce. We discussed his center's report "A First Try At ROI" which analyzed  the return on investment (ROI) for over 4500 colleges. He shares the key findings and insights from this report and how families should use this information as one input in the college selection process. 

Details:

  • 0:00~1:47 Introduction
  • 1:47~3:38 Considering the ROI of attending college 
  • 3:38~5:14 How financial aid is distributed
  • 5:14~6:13 The impact of high sticker prices  
  • 6:13~10:13 Considering graduation rates 
  • 10:13~12:33 How lifetime earnings are calculated 
  • 12:33~14:25 Going beyond the College Scorecard
  • 14:25~16:18 Gathering data by major
  • 16:18~21:18 Key findings from the research 
  • 21:18~25:58 How Pharmacy degrees, among others, are high-worth
  • 25:58~29:01  Why the research is useful 
  • 29:01~29:29 A word from NGPF
  • 29:29~31:34 When to implement the concept of NPV to students
  • 31:34~39:36 College reactions to the ranking and available data      
  • 39:36~42:18 Looking at for-profit institutions        
  • 42:18~46:06 Is college still worth it?
  • 46:06~48:18 Conclusion

Resources:

Quotes:

  • “What I tell people when they look at this information is to look at the lifetime earnings but also the graduation rates. It’s important to think about when you are investing in a college because if you go to college and you don’t get a credential, typically you will be in debt and have to pay that off without a job to pay off that debt.” 

  • “Most of what we know about colleges is its inputs. When we look at the US News rankings, it ranks reputation but it also ranks aspects like the percentage of students who were in the top 10% of their high school class or the number of faculty with terminal degrees; they’re not about outputs. They’re not about if you get a degree here or how much money you will make or if you are going to get a job. We’re trying to ask the second part of the question, what is the value of the degree after you get it?”

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Here's a recent podcast from author Michael Horn who discussed his latest Choosing College

About the Authors

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

Ren Makino

Ren has been working part-time at NGPF since 2014, interning through high school and college. With his knowledge growing alongside NGPF, after graduating from college in 2020, he joined the team to work full time with a focus on teacher onboarding. He is also the editor of the NGPF podcast and makes sure it is accessible to teachers on iTunes, Stitcher, and Google Play Music. During his free time, he likes to try out coffees from different roasters across the world and try out new brewing methods, even though personal finance gurus tend to caution against buying a cup of joe.