ROI: Education
ROI - "Return on Investment" is an business term which some educators may be squeamish about. Simply it means, "do the benefits and gains derived from an investment exceed the expense and costs of that investment?"
Those who value education for education sake will find this kind of discussion absurd. But nonetheless, many Americans are asking this question.
In a recent article in the Sunday NY Times, columnist Anna Bernasek states:
"This academic year, the better part of $1 trillion will be spent on education in the United States. That's an awful lot of spending, approaching 10 percent of the overall economy. But what exactly is the return on all of that money? While the costs are fairly simple to calculate, the benefits of education are harder to sum up..."
She goes on to note that many of the gains of an education come in the form of social and civic skills which are extremely difficult to measure. However, at least one economist has ventured to put a dollar figure on the return. From the article: "Alan B. Krueger, an economics professor at Princeton, says the evidence suggests that, up to a point, an additional year of schooling is likely to raise an individual's earnings about 10 percent."
But the author concludes that the ROI will be different for different people. Bernasek states:
"The payoff, of course, varies by individual. Another year of education will not have the same benefit for everyone. And school resources matter as well. According to studies by Professor Krueger and others, class size, teacher quality and school size can make a difference in the outcome. They have found that the effect of better schools is most pronounced for disadvantaged students."
A central goal of the Maine Department of Education these days is to increase the aspirations of Maine students and increase the number of Mainers holding college degrees. In broad terms these goals are noble. Increasing the amount of schooling should increase income levels and the Maine economy in general. But it is a little more complicated than that.
The NYT article concludes with the recognition that a college degree is more important than ever and that at the same time, the rising cost of higher education is stressing many families to the breaking point. Like all good businesswomen, the author notes that the key is to find a way to reduce the costs while increasing the payoff.
What do you think?
Ordinarily, I would provide a direct link to the NYT article for you to read, but unfortunately, the NYT is now charging a fee for viewing or downloading an article. I can give you a hint that you can still find a free copy of the article by Googling the title, "What's the Return on Education?" If you have a New York Times Select Account, you can view the article for free.
~John Brandt
