Econometric U

Connecting the dots between student debt, alumni tracking, and gainful employment
By: | Issue: March, 2017
February 27, 2017

“In God we trust. All others must bring data.” —W. Edwards Deming

Baby boomers look back nostalgically on the 1960s, some marching in the ranks of a war on the other side of the world and others marching on college campuses. It seemed a Golden Age of affordable tuition, manageable student debt, and good job opportunities – a time when the American dream of a college education and home ownership seemed within reach of college students.

Fast forward to the inauguration of our 45th U.S. President Donald Trump and say au revoir to Obamacare, Sanctuary Cities, and misguided regulations, which sabotaged access to American higher learning.

Early on in our research, we could easily forecast the explosion of enrollment in public systems as the community, technical, county, and municipal colleges took their place in the overall scheme of the 1960s and 1970s higher education marketplace.

We drifted into the 1980s on the euphoria of a red-hot economy that showed the promise of building sustainable job growth for college graduates.

Times were so good that in a Darwinian twist of fate, entrepreneurial colleges and universities were on the hunt for acquiring smaller, economically fragile institutions. In a 1989 Chronicle of Higher Education opinion editorial, we predicted a serious uptick in mission complementary, win-win program acquisitions. These mutually profitable partnerships and joint venture transactions preserved the mission and identity of the merged institution.

By the early 1990s, the Wall Street Journal portrayed us as the merger mania guys. What we had right was that baby boomers would not proliferate another generation of baby boomers and that traditional undergraduate populations would plateau, at best.

Sweeping change

In our first book from Johns Hopkins University Press entitled Merging Colleges for Mutual Growth, we predicted that American higher education would follow suit with the banking, insurance, healthcare, and hospital industries, i.e., industries whose mergers, consolidations, and closures became a frequent occurrence.

That said, we simply could not anticipate the scale of changes that were sweeping the nation in the wake of a demographic tsunami which swept in international student cohorts and more diverse faculty and staff.

Nor did we pay close attention to the incremental march of tuition and fees – running 4 to 6 percent per year in the private sector and 2 to 4 percent in the public systems’ fees.

Though we anticipated rising financial aid discounting, we had no way of knowing that it would move from a low of 10 percent to, in some more fragile colleges, a 60+ percent discount. Given the rising discount rate, families begin to wonder about the value proposition of higher education.  This issue was exacerbated by the shrinking traditional age student cohort – bringing diminished enrollment conversion yield – the gold standard for tuition dependent colleges and long-term sustainability.

Rising like a phoenix from the ashes, gainful employment soon became the coin of the realm for insulating institutions from federal and state bureaucracies and regional and specialty accreditors who shared responsibility for protecting educational consumers while ensuring that student debt load allowed for a realistic likelihood of repayment.

Fueled by media sensationalism (i.e., 60 minutes, Dateline), families came to question the true value of a college education in a quickly shifting economy and competitive workforce marketplace that valued practical skills over abstract knowledge. Today, parents want and expect independently verifiable evidence that graduates will obtain sufficient salaries to pay down student debt.

The key difference from our times is this: now, it is in the institutions’ interest to toe the line on gainful employment or risk loss of eligibility for federal and state financial aid – a virtual death warrant for predominantly tuition dependent institutions.

New data set

Fortunately, with the benefit of hindsight, a new breed of higher education econometric organizations like Emsi began anticipating significant unforeseen shifts in student success and gainful employment. Emsi’s Alumni Insight now provides a new, more intelligent data set of employment outcome data gathered from over 65 million professional profiles, helping colleges and universities interpret the several vectors of program outcomes, alumni tracking, and gainful employment. Emsi’s Career Coach helps students develop and pursue career goals that align with their passions, while Find Your Calling, an offshoot of Emsi’s Career Coach, maps career searches to college programs, providing students with decision-ready information for a more prosperous life. We learned from Walter G. Bumphus, president & CEO of the American Association of Community Colleges that: “Emsi is at the forefront, using traditional and real-time labor market information in an innovative and engaging way to help students discover their career interest and connect to programs at their college.”

Looking back, we have observed several threads running through the storylines on gainful employment. The first is that by correlating student academic success, career path, alumni tracking, and gainful employment, institutions will be adding to their value proposition and the hiring value of their graduates.

Second, by reaching out to students and connecting with their career interests, Emsi is creating an extraordinary opportunity for channeling employers’ educational attainment and career preparation expectations. In this way, these data driven econometric models give colleges and universities a propitious window of opportunity to get it right when it comes to achieving the best value proposition for students, alumni, and employers.

Though we are just beginning to scratch the surface when it comes to predicting student career success, these new econometric models give students, alumni, and their employers a significant jumpstart down the path of career success.

—James Martin and James E. Samels, Future Shock columnists, are authors of Consolidating Colleges and Merging Universities (Johns Hopkins University Press, 2017). Martin is a professor of English at Mount Ida College (Mass.) and Samels is president and CEO of The Education Alliance.