Michigan colleges offering best bang for the buck

Bradley Pischea, a senior at UM-Dearborn, says students come to the campus for the low cost, but stay because of the high quality of instruction. (Courtesy photo)

The Michigan college offering the best value for your tuition check features the school colors of maize and blue and a Block M on its sweatshirts.

But it’s not the school with the big football stadium. It’s the University of Michigan - Dearborn.

The school that is the second-best value? It’s located in Ann Arbor.

But it’s still not the one you’re thinking of. It’s Cleary University, a business school with campuses in Ann Arbor and Livingston County.

Few question the value of a college education. But comparing the value of one school to another can be confounding, often based on a host of fluid factors ranging from financial aid offerings, to a school’s reputation, course offerings or location.

In attempting to place a value on Michigan colleges and universities, Bridge Magazine went all dollars-and-cents practical: balancing the cost of the first year on campus with the average future paycheck from that school, relying on financial data recently released by the federal government on its College Scorecard.

The government data show that under this blunt formula, “value” can vary dramatically from campus to campus. Despite its limitations (only earnings 10 years after stepping foot on campus are included), this cost-vs-earnings approach gives students valuable insight into how much bang they’re getting for their college buck.

It turns out, paying more for college doesn’t always translate into bigger paychecks after you graduate. In fact, the Michigan college with the lowest average annual net cost (U-M Dearborn) produces students earning above-average salaries, while students from the university with the highest net costs (College for Creative Studies) earn below-average salaries.

SLIDESHOW: Michigan's Best Value Colleges.

Other findings for Michigan public and private colleges and universities include:

• Students get more bang for their buck at Michigan’s public universities than the state’s private colleges. Nine of the 11 schools offering the best value are public universities, primarily because the average cost of attendance is lower.
• Meanwhile, some highly respected private colleges have a low value ranking based on College Scorecard data, with high attendance costs and mediocre post-attendance salaries. Hope College, a well-regarded private school in Holland with one of the highest graduation rates in the state (78 percent), fares poorly compared with the state’s public universities.
• At some colleges, students 10 years after stepping on campus have only a 50-50 shot of earning more than an average worker with a high school diploma. For example, at Olivet College, just 52 percent of students who enrolled in 2003 were earning more than the average high school graduate 10 years later; at Cornerstone University, it was 54 percent; at Davenport University, 51 percent.

“Schools think (cost and salary metrics) are crass because there’s a lot more to college than that,” said Rachel Fishman, senior policy education analyst at the New America Foundation, a Washington, D.C.-based think tank focusing on policy issues, including education. “But at the end of the day, overwhelmingly, students will tell you they’re going to college so they’ll be more economically secure.

“Getting a job is the major reason they’re going to college,” Fishman said. “This data illuminates what students have been asking: ‘Will this degree be worth it?’”

Cheap Cadillacs and expensive Yugos

Michigan needs more college graduates. The state ranks in the bottom half of all states in the percentage of adults with a college degree. Adding college grads helps the state’s economy by filling more high-tech jobs, and increasing the tax base. College grads earn $1 million more in their lifetimes than those with a high school diploma.

But how much those attending college earn varies wildly among campuses. And spending more for that education doesn’t always result in bigger paychecks.

Bridge used a formula recommended by Paul Lapointe, economic policy advisor at Third Way, a public policy think tank in Washington, D.C., to gauge college value.

Lapointe cautions that this calculation, which compares the relationship between cost and future income at individual schools to Michigan averages, is a crude metric that misses the nuances of the values of higher education. That said, it offers families a metric that, when considered with other measurements such as graduation rates and out-of-pocket cost, can help them make informed college decisions.

The future paycheck part of the equation has only recently been made available by the federal government, and is also imperfect; it comes from all students who enrolled at these campuses and filed an application for federal financial aid, whether the students earned a degree or dropped out.

With those caveats, let’s start with the school at the low end of Bridge’s bang-for-buck analysis:

Students attending the College for Creative Studies in Detroit pay an average net cost (tuition, housing and fees minus financial aid) of $33,808 per year; Median salaries 10 years after enrollment were $40,600. That ratio ranks the school as the worst value of 36 Michigan four-year colleges examined by Bridge.

By comparison, students at Michigan Tech, a selective and well-regarded public university in Houghton in the Upper Peninsula, paid an average net cost of $14,446 per year, less than half that of the Detroit art school. Median salaries 10 years after enrollment: $60,100. That’s $20,000 higher annual income than students from the College for Creative Studies.

But for CCS, which is also well-regarded, “value” is in the eye of the beholder. Besides, it’s doubtful that many art students in Detroit want to attend the tech-heavy public university in the Upper Peninsula.

“We’re a very specialized school, and the salaries can range from very low to very high,” said Rick Rogers, president of the College for Creative Studies.

“Some are coming to learn how to become painters or sculptors, and they’re fully aware that there aren’t high-paying jobs in those fields but they’re following their passions,” Rogers said. “But we also have students studying digital animation, game design and automotive design,” fields where students can earn high wages.

CCS is the No. 3-ranked undergraduate design school in the nation, as ranked by LinkedIn. “We are committed to making the education as affordable as possible… (while) making sure the education is as high quality as possible, which is why we invest so much in our equipment and have faculty from around the world,” Rogers said.

Michigan Tech is the third-best value in the state, and the best among traditional colleges and universities that provide student housing (net cost is higher for schools that provide housing).

Michigan Tech President Glen Mroz said he believes a return-on-investment metric is more valuable to students and families making college decisions than traditional college rankings, in which school ranks rise as acceptance rates drop.

“That would be like Ford or GM determining how good they are by how many people they don’t allow to buy their cars,” Mroz said. More important, Mroz said, is what happens to the students who do enroll.

Last fall, about 1,300 recruiters came to Michigan Tech during a job fair. “We had a ratio of one recruiter for every student,” Mroz said. “These outcome-type data are what parents and students want.”

The University of Michigan-Ann Arbor, with former students earning a median salary of about $58,000 10 years after enrollment, is the fifth-best value in the state under this formula, with Wayne State seventh and Michigan State 10th.

Beating those brand-name schools is Cleary University, a small business school with a main campus in Livingston County and a second campus in Ann Arbor. “We talk about return on investment all the time with our students,” said Cleary President Jayson Boyers.

Founded in 1883 as Cleary School of Penmanship, the four-year school now has about 750 students, primarily majoring in accounting and business management.

“Small colleges to big research universities, we all have roles, but we all create values in different ways,” Boyers said. “For us, the mission is to make sure our graduates are ready to start or advance a career … without saddling them with debt.”

The top-ranked traditional private college that offers student housing is Aquinas College, a Catholic liberal arts college in Grand Rapids with about 2,100 students.

Bridge’s value rating is particularly cruel to Kettering University, and illustrates a significant caveat in the rankings when looking at longer-term earnings. Primarily a STEM and business university in Flint, Kettering is ranked in the bottom half of colleges despite its graduates earning the highest median salaries of all schools in the state.

Students who attended Kettering in Flint earned a median salary of $74,900 a decade after enrollment. But the high net cost of attendance ($30,683 a year) drove down the value. That value skyrockets, however, when lifetime earnings are considered, rather than the one-year, moment-in-time earnings available in the College Scorecard.

Grand Valley State University had the lowest return on investment among Michigan’s public universities. In its defense, Mary Eilleen Lyon, associate vice president for communications at GVSU, said the school’s student profile and course offerings have changed dramatically since 2003, the freshmen class on which salary data is available in the inaugural year of the federal College Scorecard. Grand Valley now offers more STEM and health field majors, which lead to higher-paying jobs, and it is enrolling students with higher academic achievement in high school, Lyon said.

Hope College is a well-regarded private school, drawing students with similar college entrance ACT scores as MSU. Yet Hope ranks near the bottom in value, with its former students earning average wages but paying significantly higher college costs than at most state colleges and universities.

“Many of our students will pursue post-graduation programs such as the Peace Corps and extended volunteer opportunities,” Jennifer Fellinger, vice president of public affairs and marketing at Hope, told Bridge in an email. “Some will graduate and go right into the workforce, in fields that include social work, education, ministry and the arts. Others will pursue innovations and inventions (personally or professionally) — pursuits that sometimes require time, risks and investment.

“Is the value of these students' work reflected only in their paychecks? Some may have great earning potential, either immediately after graduation or a few years out,” Fellinger said. “Yet, many graduates are contributing to their communities, and the global community, in meaningful ways that are not measured by salary. One must consider how best to measure service to others and progress toward innovations that may, down the road, improve the lives of many.”

Saving money by living at home

At the top of the heap is a school with one of the lowest profiles among Michigan’s public universities. Students who enrolled at the University of Michigan-Dearborn received a greater value for their college dollar under this formula than students at big-name schools such as U-M Ann Arbor and Kalamazoo College.

How U-M Dearborn achieves that value offers a lesson for families looking to minimize college costs. Most students live at U-M Dearborn live at home, losing the experience of dorm life but saving thousands.

Brent Ott is a typical U-M Dearborn alum. The Allen Park native enrolled at Dearborn because it was inexpensive, and close enough that he could live at home. “I grew up in a middle-class family with a big work ethic,” Ott said. “Going to U-M Dearborn, I could live at home and work part-time while going to school.”

Brent Ott, CFO of The Henry Ford museum, is a UM-Dearborn alum who praises the high return on investment the school offers students

Ott earned an accounting undergraduate degree in 2007 and an MBA at the school in 2013. Today, at age 31, he oversees a $55 million budget as vice president of business services and chief financial officer of The Henry Ford, which includes the museum and Greenfield Village.

In his job he’s used to thinking about return on investment. Ott said the new college income data will allow families to do the same when they’re looking at colleges.

“Before, families were reliant on a school’s marketing efforts to learn how they perform,” Ott said. “Now that these metrics are coming out, smaller universities are on a more level playing field” with big, brand-name schools.

“Initially, a lot of people come here because of the cost,” said U-M Dearborn senior Bradley Pischea, 21, of Haslett. “But I think when people get here, they understand the value. You’re getting a really practical education here, doing internships and co-ops, with small class sizes. I don’t think I’ve been in a class of over 40.”

U-M Dearborn has no dorms, which keeps the school’s net cost ($9,800 per year) below that of all other Michigan public universities. That low cost in turn boosts the value.

“We do enjoy a huge advantage in the equation by not having housing,” said Roma Heaney, director of institutional research at U-M Dearborn, “but that’s exactly a reason why they choose us ‒ because they get to stay at home and get a University of Michigan education for a low cost.”

Rogers, the CCS president, said he views post-college salary data as a step toward greater transparency, but it is only one factor among many for students and families to consider.

“The government’s effort to make information as accessible as possible is very well-intentioned and admirable,” Rogers said. “But I also think that a simple assessment of a college on how much it costs versus how much grads earn in the long run does not tell the whole story.

“There are a lot of roles in society that are valuable and needed that don’t necessarily pay a lot of money. An equation that says, if you’re going to go into a profession that is low paid, you should go to a cheap college, doesn’t seem like a valid way of looking at things.”

The total value of college can’t be reduced to size of a paycheck, Rogers said. “Families making decisions should take a lot of factors into consideration, cost being just one of them,” Rogers said. “Is it the right environment? Does it offer the best preparation for their career goal? Does it make them not just financially successful, but happy and a fulfilled person? Does it impart to them a sense of what their responsibilities as citizens should be?”

An even better scorecard?

The federal College Scorecard is part of a White House initiative to make college decision making more consumer friendly, by providing more data on college performance and costs.

Because the Scorecard includes data only on students who filled out an application for federal financial aid, students from many high-income families aren’t included. The data also lumps together students who graduated and those who dropped out or transferred to other schools.

Perhaps more problematic, by offering only one median salary for each school, big differences between programs offered by large universities (such as teacher education versus engineering) are missed. For example, the Scorecard gives consumers no way to measure how well engineers from Kettering are paid compared with engineers from the U-M Ann Arbor, which offers a slew of liberal arts degrees in addition to its highly rated Engineering program.

“At the institution level, it doesn’t tell you much,” said Tamara Hiler, education policy advisor at Third Way, a centrist Washington, D.C.-based think tank. “That being said, I think it’s really important that the federal government has released this data for the first time.”

Hiler said she believes the next step ‒ data on salaries at the university program level ‒ is on the horizon.

That’s already happened in Virginia, where the state government has compiled earnings data for graduates of individual programs at public and private universities within Virginia.

“So if I’m a family in Virginia, I can look and see, ‘Oh, if I’m an English major at George Mason, I’m making twice as much as English majors at (another Virginia university) just down the road,” Hiler said.

“This type of information is available for states to take advantage of,” Hiler said. Until that occurs, “we’re very skeptical this information is going to lead to major consumer change.”

Mike Wilkinson contributed to this report.