Future Value of College Educations - ROI (Real or Implied) Credentials

Not long ago, the term Return on Investment was used mainly by bankers, stockbrokers and portfolio managers. Now it has made its way into higher education.

Just last month, President Obama announced his intention to have the federal government institute a performance rating system by 2015 that would steer families to schools offering the best value. With the value or standings of a particular college linked strongly to the number of diplomas handed out each year, many schools have developed programs to go after their proverbial "low-hanging fruit" by contacting students who already have the credits in hand and just need to complete the paperwork to collect their degree.

It's a shame when a student completes the credit hours needed to earn an associate's degree or certificate and then transfers without this credential. According to a six-year study conducted by the National Student Clearinghouse, baccalaureate attainment rates were much higher for students who transferred with a two-year degree or certificate (72 percent) compared to those who transferred without a credential (56 percent).

At College of DuPage, we have embarked upon a concerted effort to ensure as many of our students as possible complete their degrees before moving on. In less than one year, more than 1,474 COD additional students have earned a degree or certificate through our Graduation Initiative, which we consider a win-win situation.

I'm all for a better educated population of young adults in this country, and it appears we're on our way toward making this happen. According to a recent New York Times article, the number of Americans graduating from college has "surged" in recent years, following more than two decades of slow growth in college completions. In 2012, 33.5 percent of Americans ages 25 to 29 had at least a bachelor's degree, compared to 24.7 percent in 1995.

This is definitely good news. However, in the quest to increase graduation rates as a means to obtaining a favorable "performance rating," or ROI, schools must not push through students who are unprepared to meet the rigors and challenges of a real-world position in today's workplace. Some colleges and universities are ready to go the extra mile to make sure their graduates have truly absorbed and can apply the material they've learned in school. According to a recent article and news program from the Wall Street Journal, students at roughly 200 U.S. colleges will be required this spring to take a new SAT-like assessment called the Collegiate Learning Assessment + (CLA) that determines what they've really learned while obtaining their bachelor's degrees.

This exit test is part of a movement to find new ways to assess the skills of graduates. Employers are onboard, stating that grades can be misleading and they have "grown skeptical of college credentials." This new voluntary test is being developed at a time when the value of a diploma is more difficult than ever to calculate and is being questioned by all sides of the equation -- the educational system, employers, parents and students themselves.

According to the Council for Aid to Education, the CLA + test creator, the $35 exam will be open to anyone -- whether they are graduating from Harvard, a community college or have just completed a series of MOOCs. Students will be encouraged to show their results to prospective employers as an additional credential on their resume when seeking jobs. Other testing companies are jumping on the bandwagon, including The Lumina Foundation, the MacArthur Foundation, Educational Testing Services (producers of the GRE) and ACT, the nonprofit that administers the college-admission exam, which has developed a National Career Readiness Certificate.

For decades, health care, marketing, construction, technology and other industries have required certification exams to make sure their new hires can perform on the job. According to a recent Forbes article, many small businesses are actually auditioning their candidates before hiring. In the near future, I would not be surprised to see major corporations, especially in fields that require hands-on, specialized talents, developing individualized, skills-based tests for applicants prior to granting an interview as a way to weed out candidates. At that point, the educational process will have come full circle and the hiring agencies will know whether a candidate's credentials are real or implied - and whether the company is making the best ROI in hiring one person over another outside of the applicant's paper-based qualifications.