The message to high school students is clear: Go to college for a better life.
But for too many students, college doesn't deliver on those promises. At a quarter of American colleges, the majority of students who got federal financial aid end up earning less than $25,000 per year a full decade after they first enrolled.
That startling statistic comes from an unprecedented trove of data released Saturday by the White House. The Education Department and Treasury Department combined forces to link a huge database of all students who got Pell Grants or student loans since 1996 with their income tax records, producing the clearest picture ever of how students who received federal financial aid fared in college and after.
The numbers show which colleges are living up to their promises to students, and which are not. They demonstrate how hundreds of colleges leave their students struggling long after they enroll — either because they dropped out before graduation or because their credentials turned out not to be worth much in the labor market.
A new tool gives us more information about colleges than ever before
The new data feeds into a revamped tool called the College Scorecard, basically a search engine for colleges. Prospective students can look up the colleges they want to attend and get more information than has previously been available in one place about graduation rates, prices, student loan debt, and earnings after graduation.
Here's how part of that information will appear on the new site:
The Obama administration also released much more detailed raw data on the types of students colleges enroll and how those students fare. You can single out colleges that charge high prices to students from low-income backgrounds who later to struggle to pay down their debt, for example, detail that using only averages for the entire student body might obscure.
The administration initially meant to use this information to create a Consumer Reports–like system to rate colleges based on their quality. But they scrapped the idea earlier this year, opting instead to release the raw data and allow the public to draw its own conclusions.
"We made the decision to not make clear, direct ratings, because we felt like the data was not supportive of drawing those kinds of conclusions," said Education Undersecretary Ted Mitchell in a call with reporters Friday afternoon. "But we believe the data itself can drive decision-making, can drive further inquiries that students want to make."
He acknowledged the data has problems. The standard federal graduation rates are, for example, criticized for excluding students who transfer without earning a degree, a problem that's especially acute for community colleges. The earnings also include only information on federal student loan borrowers, not all students who enroll, although Mitchell said the findings are generalizable to all students.
Some colleges argue that graduation rates and earnings don't just reflect whether the college is doing a good job, but the students it admitted in the first place. It's not hard to have a high graduation rate when you're enrolling academic superstars from well-off families; it's much harder to help students from disadvantaged backgrounds achieve the same results.
That's why the detail in the new data is important. It makes it possible to compare colleges serving similar groups of students, such as low-income students of color, and highlight those that do it best.
The White House used the data to identify "engines of opportunity" — colleges that enroll a large share of low-income students, don't charge them a high price, and graduate them successfully. Among those colleges are the University of California Irvine and the State University of New York at Albany. It also picked out a few colleges with very high graduation rates and median earnings, including Notre Dame, Middlebury, and the University of Maryland.
The colleges whose students are worse off than the typical high school graduate
At 205 colleges, fewer than 25 percent of students earn more than $25,000 per year, even a decade after they first enrolled, according to a Vox analysis of the new data. Some colleges leave the vast majority of their students worse off than the typical high school graduate.
Most of them are beauty schools. Many people might not think of a place like Razzle Dazzle College of Hair Design Inc., a for-profit beauty school in Idaho, when they hear the word "college." But for the purposes of federal financial aid, it is: Nearly every student there takes out federal loans — $20,000 on average — to pay for his or her education.
Only 11 percent of students there finish on time. And 10 years after they enrolled, 75 percent of students were earning less than $25,000 per year.
There are plenty of similar stories.
Roger's Hair Academy in Evansville, Indiana, promises it has "provides tools to maximize salon business readiness, preparing you for success." But 10 years after they first enrolled, 90 percent of former students are making less than $25,000 per year.
The website for Camelot College, a career college in Baton Rouge, Louisiana, promises that "thousands of graduates … are now employed and living successful lives." But of all students who enrolled, only 20 percent were making more than $25,000 a decade later.
There's a reason beauty schools fare so badly, and it's not that they provide a terrible education. They simply prepare students for jobs that don't pay well, yet require a postsecondary credential anyway. The median annual wage in cosmetology is under $25,000 per year. Still, becoming a barber or hairstylist typically require state licensing, which in turn requires some kind of formal training. In other words, people who want to cut hair for a living have to pursue some kind of education after high school and pay for it, often with student loans, even though they're not likely to make the kind of salary that most people expect for college graduates.
Judging a college by its earnings is sometimes silly, but sometimes useful
Nobody expects every college to make graduates rich. Almost always, the colleges with the highest-earning graduates focus on specific fields, such as medicine or engineering. The gender wage gap means that colleges enrolling more women nearly always end up looking worse than colleges with a lot of men. And colleges whose students go into less lucrative work, including teaching and public service, worry that judging colleges based solely on their graduates' median income will overlook their other benefits to society.
But it's not unreasonable to expect students who pursued additional education after high school to earn more than students who did not. Aside from beauty schools, there are more than 400 colleges where, 10 years after they first enrolled, most students still weren't earning $25,000 per year. Most are two-year colleges, many of them for-profit.
When the majority of a college's students fare so poorly a decade on, it usually indicates one of two problems: Students are either dropping out of college in huge numbers or earning degrees that employers don't value. Those are separate problems, but they both indicate that something has gone wrong.
Most public and private nonprofit four-year colleges do much better, with only about 15 percent of students earning less than $25,000.
Why the new data matters
Much of the conversation about whether college is "worth it" focuses on students who get liberal arts degrees and end up working as baristas. And the data release does offer the opportunity to compare students' incomes and their ability to repay their debt more closely.
It also shows where earnings alone can't tell the full story. Just 56 percent of students who started at Juilliard end up earning more than $25,000 per year 10 years later — but that's as much a cautionary tale about a career in the arts as it is about a specific college.
Still, the inclusion of the $25,000 threshold is a reminder that there's a vast swath of colleges that aren't meeting even the minimum standard of helping their students do better than the typical high school graduate.
It shows why "go to college for a better living" can be incomplete, even dangerous, advice. Whether a college successfully delivers on that promise depends in part on students' academic abilities and work ethic. But it also depends on the college itself: its graduation rate and the quality of its programs.
Releasing more data than ever before makes it easier to identify the worst-performing colleges. It's not yet clear if that will be enough to steer students away from them.