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Investment in Catholic Higher Ed Pays Dividends
In a national survey of return on investment in higher education, Catholic institutions performed well, especially in the long term
By Nadine Jalandoni
In late 2019, the Georgetown University Center on Employment and Work (CEW) published a groundbreaking study that measured the return on investment (ROI) from completing a college degree at thousands of private and public institutions (“A First Try at ROI: Ranking 4500 Colleges”). Using data from the U.S. Department of Education’s online College Scorecard, the report provided the net present value (NPV, an estimate of how future earnings are valued in the present) of a college degree after 10, 20, 30, and 40 years.
Among the key findings were that community colleges and certificate programs provided the highest ROI in the short term (10 years after degree completion). In the long term, however, institutions that award bachelor’s degrees have the highest ROI and private non-profit colleges and universities fared better than public universities.
Building on this original study, CEW published a report in 2020 on institutions commonly perceived as liberal arts colleges, as defined by the Carnegie Classification system (“ROI of Liberal Arts Colleges: Value Adds Up Over Time”). This newest report found that liberal arts colleges and universities delivered the third-highest long-term ROI among 14 different categories of colleges.
How Do Catholic Colleges and Universities Stack Up?
ACCU reviewed data for 190 Catholic colleges and universities in the United States from CEW’s online database to determine how these institutions fare in ROI compared to other higher education sectors. (Only four-year degree-granting colleges and universities are included.) Figure 1 displays the median ROI of Catholic four-year colleges and universities compared to other types of institutions.
Figure 1. Short- and Long-Term ROIs of Higher Education Institutions, by Net Present Value
As shown, Catholic institutions have a lower ROI in the short term (10 years after degree completion) than public institutions (affected largely by their lower tuition and fees), but fare well when compared to other liberal arts colleges and private non-profit institutions, outpacing them by over $15,000.
By the 15-year threshold, Catholic colleges begin to have a slight lead in ROI over all other types of institutions, including public colleges and universities, as shown in Figure 2. The Catholic edge becomes pronounced in the long term (40-year NPV), showing the highest median ROI among all types of higher education institutions — 16 percent higher than private non-profits and 27 percent higher than public institutions.
Even when compared to nine other categories of higher educational institutions using the Carnegie system, the long-term ROI of Catholic colleges and universities continues to measure up well. Only the most selective doctoral research universities exhibit a higher ROI (see Figure 3).
Figure 2. ROI of Higher Education Institutions Over Time
Figure 3. Long-Term ROI of Catholic Colleges Compared to Other Categories of Institutions
In further reviewing the overall rankings of Catholic institutions among the 4,500 educational institutions included in the study, we find that:
- Nine Catholic institutions are ranked in the top 100, with one landing among the top 10.
- Close to 40 percent of Catholic institutions are ranked in the top 500.
- Eighty-three Catholic colleges and universities (43%) have 40-year NPVs of $1 million or more.
- Catholic colleges with higher NPVs are strongly linked to geographic areas with a higher cost of living. These colleges also have higher graduation rates.
Nadine Jalandoni is Director of Research at ACCU.