“College presents the most promise to low-income students and the highest reward,” said Martin Van Der Werf, a co-author of the report and director of editorial and education policy at the Georgetown center. “With 5,000 colleges, it’s really hard to sort through them. Counselors, parents and guardians have to come into the equation to help break this down with young people who are thinking about a college — because it is a huge investment.”
“You don’t buy a house strictly on emotion,” he said. “You look at the number of bathrooms and bedrooms and what houses around there are going for. But college has been a black box where you make this commitment without knowing what the outcome will be.”
The Georgetown study shows low-income students earn a lower return on investment than all students across public and private institutions and degrees, largely because they tend to earn less as adults. A 2021 study found low-income college grads have fewer connections and less cultural, social and economic capital to draw on during job searches. They accept positions that pay less and for which they are overqualified because they have to start earning money quickly.
Among institutions that primarily award bachelor’s degrees, the Georgetown study found public colleges lead to the highest return for low-income students during a 40-year timeframe — $951,000. If students attend private nonprofit institutions, on average, the return over 40 years is $863,000. If they attend for-profit colleges, the return is $763,000.
But there is great variation. Many highly selective schools give low-income students a hefty return on investment, but such elite schools enroll few poor kids. For example, the 40-year return from an Emory degree is $2,181,000, but the report notes that 1 out of 5 students there is low-income. The return at Georgia State University, where half the students are low-income, is $975,000. However, the Georgetown report shows that Emory graduates 88% of its low-income students, while GSU graduates 54%.
“Most highly selective colleges have very high graduation rates, and, if a student goes, there is a very high chance they are going to graduate,” said Van Der Werf. “It always pays off to go to the best college you can if it’s a good fit. One of the things this study shows is that in large metro areas like Atlanta, there may be a half-dozen colleges offering essentially the same degree but with widely varying payoffs. You are not going to make your decision strictly by the expected payoff when you get out, but it ought to be among the considerations.”
He urges students to look closely at for-profit schools that invest heavily in marketing. “They may have exactly the opportunity you are looking for and they are good at selling it. But the schools are very expensive, and many people don’t end up finishing,” said Van Der Werf. “We need a comprehensive career counseling system to help potential students determine whether a college program is worth the investment.”