How colleges can help graduates land good jobs – 5 things students should know

A new report gives some answers and could help students evaluate their college options.

How can students know if the college they attend is doing all that it could to help them land good jobs after they graduate? What policies are most important for students to become better connected to their chosen careers?

Those are questions students and their families want and need to know as they make decisions about what college to attend and what to study once there.

Assessing states’ higher education policy outcomes

A key factor shaping many college practices is the higher education policies existing in a given state. States play the biggest role in governing and funding institutions of higher learning and managing the pathways between them and employers.

It would be helpful then to have a guide that shows how well each state is doing in helping college graduates earn affordable post-secondary credentials that lead to good jobs. Fortunately, a new report from the Strada Education Foundation does just that. Entitled The State Opportunity Index, it offers 5 criteria for judging each state’s postsecondary education system, including its affordability, the mentoring and guidance students receive, and its ability to address economic prospects and workforce priorities.

The report’s original aim was to give state leaders a baseline from which to measure future progress, but it also offers students insight into how states and their colleges measure up right now.

What students will discover is that some states, like California and Washington, score well on the affordability of their colleges; while others, like Alabama, Pennsylvania, and North Dakota, fare more poorly. Rhode Island and Utah receive high marks for aligning their college degrees with high-demand/high-wage employment opportunities, while New Hampshire, Louisiana, and Nevada lag on this score.

Unfortunately, no state appears to be doing especially well at providing career coaching, paid internships, and other work-based learning opportunities that have repeatedly been proven to be key to strong college-to-career pathways.

The State Opportunity Index begins with a unique measure of the return on investment (ROI) students can expect from post-secondary education. It measures the percentage of college degree holders between the ages of 25-34 in a state who:

• earn annual wages higher than the median wages earned by those of the same age who don’t have a post-high school degree, and
• also have cumulative earnings 10 years later greater than what they invested in their postsecondary education. Total investment is the net price of education after high school for in-state students at public institutions (i.e., the cost of tuition, books, fees, and living expenses, minus any grants and scholarships) plus interest and fees accrued in repaying these costs over 10 years.

This ROI measure differs from others in 2 ways. First, it’s concerned with individual earnings, rather than median earnings. In other words, it shows the percentage of graduates achieving a positive ROI rather than how much the median graduate achieves compared to a non-grad. Second, while most ROI calculations focus on institutions, the Strada measure quantifies state-level performance.

Students won’t be able to compare the ROI of specific colleges (although Degreechoices offers a convincing degree comparison tool based on the ROI concept), but they will be able to evaluate how well the public institutions in any state perform versus those in other states.

In a handful of states, like California and New York, the ROI of a college degree is high, reaching almost 80%, but in others, like North Dakota and Idaho, less than 65% of college graduates earn enough to achieve a positive ROI.

What accounts for the disappointing results? In too many states the cost of college remains too expensive for lower- or middle-income students. In others, a failure to collect basic data about education-to-employment outcomes is to blame; while inadequate coaching, advising, and mentoring about how college degree options connect to specific careers is also a frequent culprit.

Another well-documented factor is the lack of work-based learning via paid internships. Finally, the failure to align college degrees to the best local or regional employment opportunities is a problem in many states.

Here’s a summary of what the report found about each of these factors.

State ROIs

Considering graduates with either an associate or a bachelor’s degree, the percentage who clear the positive ROI threshold within 10 years ranges from a low of 55% in Idaho to a high of 79% in California, Delaware, and New York.

Washington, D.C. had the highest ROI at 85%, but because most of its degree holders earn their diplomas at institutions outside the District of Columbia or at private institutions, its results were less relevant for the report.

About half the states had an ROI percentage of 70% or better, counting both 2-year and 4-year graduates. In most, the ROI for graduates with bachelor’s degrees trends higher than for those who’ve earned an associate degree. That difference can be substantial. For example, in the large states of New York, California, Texas, and Illinois, the proportion of bachelor’s degree graduates with a positive ROI is 22, 17, 15, and 15 percentage points higher respectively than for those with an associate degree.

Two factors – the cost of a degree and median high school income – influence the percentage of graduates realizing a positive ROI within 10 years. But the key factor is how much a degree holder earns on average.

The total cost of obtaining a BA degree, with student loans paid off within 10 years, ranged from about $35,000 in Wyoming to about $95,000 in Pennsylvania. The median income for state residents with only a high school diploma varied across a much smaller range, from about $30,000 to $42,000 per year.

A student earning a bachelor’s degree from a public institution in Wyoming and working there after graduation is less likely to see a positive ROI than a BA graduate in Pennsylvania. That’s because the additional $60,000 Pennsylvania students invested in their education will be more than repaid by their higher post-completion wages.

Overall, graduates who earn at least $50,000 per year will likely see a positive ROI in even the most expensive states, while students earning less than $30,000 annually will not see a positive ROI no matter how inexpensive their education. That’s because their earnings don’t exceed the median of a high school graduate in that state.

The State Opportunity Index singles out 5 policies states can use to improve the economic value of college credentials. It assigns states to one of 4 categories based on their current progress: Leading (the highest level of progress), Advanced, Developing, and Foundational (the least progress).

Students can evaluate the current profile for any state where they are considering attending college.

1. Clear Outcomes

This priority assesses the extent to which students, institutions, employers, and policymakers have access to specific data on measures like graduate earnings and career outcomes. Think of them as accountability measures that enable one to gauge how thoroughly a state is measuring college outcomes and their implications for work, life, and income.

They pinpoint areas that need improvement, enabling states to push their colleges to do better.

Based on a review of 10 possible elements in state data systems, the report concluded that more than half of states were Leading or Advanced in some categories constituting solid education-to-employment information systems.

However, only a few states maintain wage records giving insight into the occupational outcomes of postsecondary education programs, and fewer than half were judged Leading or Advanced when it came to tracking outcomes from high school to employment or providing open data files.

Colorado, Georgia, Minnesota, Kentucky and Arkansas were examples of states that were graded as advanced on this metric.

2. Quality Coaching

This priority examines how much coaching, mentoring, and advising recent graduates receive, helping them connect educational goals to career prospects. 3 dimensions of quality coaching were measured, using national surveys of recent graduates:

1. self-reported experiences of coaching and guidance;
2. timely information about career and earnings possibilities; and
3. support for setting goals and overcoming obstacles.

Colleges have a long way to go to provide adequate levels of quality coaching. Nationally, only about a quarter of graduates of 2-year institutions and about a fifth of graduates from 4-year institutions received personalized coaching that included all 3 dimensions. Barely half (54%) of graduates from public 2-year colleges and 53% of 4-year graduates reported receiving personalized coaching or guidance.

Good coaching matters. It can have a major impact on students. The report found that recent BA graduates who received all 3 dimensions of quality coaching were more likely to have a first job requiring a college degree. They also were significantly more likely to be satisfied with their jobs and the progress they were making toward long-term career goals.

Students should inquire about the coaching, mentoring, and advising systems their prospective colleges have in place. Quality coaching can make a difference between a degree that leads to economic disappointment and one that helps students thrive financially.

3. Affordability

Obviously, being able to afford college promotes higher levels of degree completion and eligibility for preferred careers. Each state’s college affordability was measured by the number of hours a student needed to work annually, earning their state’s median wage to be able to cover the net price of their education.

Based on that measure, California and Washington were the most affordable states. A student paying the average net price in these states would need to work less than 10 hours per week during the school year and full-time during the summer to be able to cover the net costs of tuition, fees, and living expenses.

The least affordable states were Alabama, Georgia, Louisiana, Montana, New Hampshire, North Dakota, Ohio, Pennsylvania, and South Dakota. In those states, a student working more than 30 hours per week during the school year plus full-time during the summer would still not be able to cover their net post-secondary education costs.

Only California and Washington were described as Leading on this metric; 15 states were categorized as Advanced, 25 as Developing, and 9 states were classified as Foundational. Not surprisingly, 4-year institutions were less affordable than 2-year institutions. No states were considered Leading on affordability for 4-year institutions, while 24 states hit this mark for their 2-year colleges.

4. Work-Based Learning

Based on surveys of recent graduates, the report determined what percentage of grads had participated in an undergraduate internship, and, if so, whether they had been paid.

Overall, just under half of recent graduates from 4-year colleges and universities and one-quarter of recent 2-year college graduates had completed an internship (both paid and unpaid). Slightly more than one-quarter of recent BA degree graduates and 10% of recent associate degree completers had held a paid internship.

Graduates who completed a paid internship were much more likely to take a first job that required a college degree (73%) compared to those who didn’t complete an internship (44%). In addition, they were more likely to be satisfied with their first job and with the progress they were making toward long-term career goals compared to students who had an unpaid internship or no internship at all while in college.

The value of college internships has been documented in study after study. A paid internship is one of the college experiences most strongly associated with securing a good job after graduation. Internships lead to several advantages. They provide on-the-job training to supplement classroom instruction. They help build workplace connections that can pay off in terms of later reference letters and referrals for job openings. And they function like an audition for a possible post-graduation position with the internship sponsor.

If students were to consider only one priority from the report as they weigh their college choices, how strong of a paid internship program a college offers would top the list.

5. Employer Alignment

The State Opportunity Index calculated an employer alignment metric for each state. It’s an average score made up of the supply/demand ratio for a variety of high-demand, high-wage jobs in the state and the estimated percentage of bachelor’s degree holders ages 26-30 employed in college-level jobs.

The 9 occupations judged to have the best opportunity for strong earning and continued economic advancement were cybersecurity, data analytics, finance and accounting professionals, finance and accounting support, software engineering and development, health care technicians, nursing, engineering, and manufacturing technicians/technologists.

Alabama, Rhode Island, Utah, and West Virginia were the top states for meeting the talent demand for “opportunity jobs.” Alaska, Montana, and New Hampshire were the states most underproducing talent in these occupations relative to demand.

The top states for college-level employment were Maryland, Massachusetts, and Utah, in addition to the District of Columbia. The states doing the most poorly with college-level employment were Hawaii, Maine, Montana, and Oregon.

Future financial remuneration is not – and should not be – the only reason students choose to major in a certain field. However, securing a good job after graduation remains the number one reason most students attend college.

The report offers valuable insight for students regarding not only the demand for certain majors but also how well states connect that demand with the curricula in their public colleges.

Final thoughts

A postsecondary degree generally conveys a substantial advantage to college graduates over that experienced by job seekers with only a high school diploma. But it’s only an advantage, not a guarantee.

The State Opportunity Index was prepared to help higher education leaders, state officials, and business leaders design clearer pathways between post-secondary education, better job opportunities for graduates, and stronger economic prospects for employers. But it accomplishes something else along the way. It gives students a new way to evaluate their college and degree choices, with a particular eye toward their economic future.

There are many other ways to rank and compare colleges as well. See our rankings of the best national universities in the country to see which colleges are providing students with the optimal combination of affordability and high earning potential.