How Colleges Stack Up on the Payoff for Students

One of the most important measures of a college is how its students fare in terms of graduation rates, salaries and debt repayment
Yale University topped the outcomes list in part due to its financial-aid policy.
Yale University topped the outcomes list in part due to its financial-aid policy. Photo: Craig Warga/Bloomberg News
By Melissa Korn
Sept. 27, 2016 10:37 p.m. ET

Students choose a college for all kinds of reasons—from the courses it offers to the quality of its football team—but in dollars and cents, the best measure of a good college is what happens after graduation.

Can the new grads find jobs? Can they repay their loans? Will their diplomas open doors—or shut them?

While exercises in intellectual exploration are valuable, and a truly integral part of the college experience, these student outcomes matter. And with student-loan debt in the U.S. totaling $1.3 trillion and the average debt burden for those who received loans topping $28,000, outcomes matter perhaps more than ever before.

That’s why The Wall Street Journal/Times Higher Education College Rankings weighted outcomes as the most important factor in our overall ranking, with a hefty 40% of the total score. Outcome scores are derived from graduation rates and academic reputation, as well as measures of loan-repayment rates and graduate salaries that take into account the educational performance, financial backgrounds and other characteristics of a school’s student population.
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“College is about opening the door to economic independence,” says Anthony Carnevale, director of Georgetown University’s Center on Education and the Workforce. “You’re going to have to have a career someday. You’re going to do this for four or five years, but what you’re going to do for the next 45 years is intimately linked to that.”
Yale is No. 1

By our analysis, Yale University is the best U.S. college in terms of student outcomes. A whopping 97% of its first-time, full-time students graduate within six years and 95% of those with federal loans were paying back some of the principal three years after graduation. Within 10 years of starting school, median salaries for Yale graduates who got federal aid and are therefore in the government’s College Scorecard database top $70,000.

Jeremiah Quinlan, the dean of undergraduate admissions at Yale, says the school’s stellar performance is due in part to its generous financial-aid policy. The school says about 83% of undergraduates graduate debt-free. Those with loans generally have low balances.

“At Yale we are deeply committed to making our world-class education affordable for all students,” Mr. Quinlan says.

Tied for second place in our outcomes ranking are Princeton University and Stanford University, both wealthy schools with large financial-aid budgets, meaning graduates don’t take on much debt. Students at such elite schools also have well-paved paths to high-earning careers, thanks to generations of alumni connections at big corporations.

Columbia University and Duke University tied for the fourth spot in the ranking.
Beyond raw numbers

There’s a reason why these rankings don’t just score schools based on a straight analysis of graduate salaries. Such a measure may reflect how many investment banks and consulting firms show up for on-campus recruiting sessions. But it doesn’t reveal the true return on investment, the extent to which a student is doing better—or worse—than they would have if they hadn’t attended that particular school.

In other words: Outcomes must be measured with some understanding of the inputs. Schools with many students from economically disadvantaged backgrounds are working with a population that mostly doesn’t have personal connections to hiring managers at Goldman Sachs or McKinsey. So it’s a big win for a school with a large share of first-generation college students to report that graduates actually do land those jobs and are in good standing on repaying their loans.

Our value-added measures of loan-repayment rates and salaries were calculated by comparing predicted salaries and repayment rates—based on factors like students’ SAT scores, family income and an institution’s population of first-generation students—and the actual outcomes. We used a landmark 2015 Brookings Institution analysis of value-added college outcomes as a guide on this measure, recognizing that high graduate salaries alone don’t indicate school success.

“If you’re Harvard, and you take all the best students, and they get all the best jobs, you’re not necessarily taking them on much of a journey,” says Phil Baty, the Times Higher Education rankings editor. (Harvard University landed at No. 14 in our outcomes ranking, in part because only some 85% of students with federal loans were paying back some of the principal three years after graduation. Few had loans to begin with.)

One example of outcomes strength is the University of Virginia. It tied for 56th in our overall ranking, but comes in at No. 32 on outcomes thanks to a cap on loans it expects students to take out, a solid proportion of graduates who enter engineering and business fields, and among the best six-year graduation rates of any public institution.
The role of reputation

One word of caution when looking at our outcomes table: Salaries vary widely by major. But the federal College Scorecard on which much of this analysis is based doesn’t break down salaries for particular majors, limiting how we could collect such granular information.

“That’s very rough stuff,” Georgetown’s Mr. Carnevale says of the lack of specificity in the scorecard data on salaries. But he says it spurs prospective students and their families to “realize this is something they should be asking about.”

Finally, the outcomes ranking includes a measure that isn’t purely quantitative—academic reputation. The results of this measure, derived from a survey of academics associated with U.S. institutions and conducted by Times Higher Education and Elsevier, favor schools with the most recognizable brands. Academics were asked to identify the U.S. schools they feel have the best reputations for teaching. An institution well-known regionally but not nationally may not score as well as schools with broader prominence.

Ms. Korn is a Wall Street Journal reporter in New York. She can be reached at Beckie Strum, a writer in New York, contributed to this artlcle.

Corrections & Amplifications:
Some of the rankings mentioned in this article may have changed slightly due to subsequent adjustments to the data. For the latest rankings for 2016, see (Sept. 28, 2016)

1 day ago

Given that Yale, and other top schools all offer aid generous enough that students need not take out loans unless they choose not to work in the summer or take term-time employment, I do not know why the military academies were not included in this survey. Moreover, most of the top schools view themselves as offering a liberal education, not as trade schools offering terminal degrees. Most of their students go to a professional school or graduate school after undergrad. The normal business route is to work for a few years and then go to B school Medical school is four years. Many professional schools do not offer the generous aid packages that the top undergrad schools, so students might, as is their right, not pay their undergrad loans until they get out of professional school and into the workforce. For students getting a PhD, five to six years is the norm to complete classes and their thesis.
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5 days ago

I think you also have to look at what school job recruiters go. They know which school have quality programs. This is really missing in your survey. If I wanted to hire a top notch accountant I would certainly look at the University of Illinois or University of Michigan over Stanford.
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1 day ago

@RONALD MOONIN Stanford does not have an accounting major.
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5 days ago

When it was discovered that people with degrees made more money than people without, nobody bothered to notice that the choice of degree made a huge difference. “XX Studies” programs produce indebted baristas, for example.
Since then, the discussion has grown more and more incoherent because nobody can even agree on the purpose of education. Democrats are convinced that the purpose of education is to provide safe jobs for academics who indoctrinate young people in liberal dogma.
Ivy league colleges have utterly different objectives from stem schools, for example. It’s far too long to post here, but “The Purpose of Education – University Goals” at discusses competing convictions about the purpose of education.
What do you think is the purpose of education?

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