A think tank that ranked the nation’s public state universities based on return on investment found that the top states include South Dakota, Minnesota, Iowa, Kansas and Pennsylvania.
Some of the worst-performing states, according to the Foundation for Research on Equal Opportunity, are Hawaii, Montana, Louisiana, Connecticut and New Mexico.
The foundation determined return on investment, or ROI, based on “the amount a student can expect to earn financially from each individual degree.”
“ROI compares the primary financial benefit of college — the increased income attributable to college graduation — to costs, including tuition and lost earnings.”
Preston Cooper, a researcher at the foundation who wrote a summary of the findings, said the rankings by state “allow us to learn lessons about best practice in higher education. States that consistently produce high ROI must be doing something right.”
Among the best states are South Dakota and Minnesota. Campus officials from both the University of South Dakota and the University of Minnesota declined to comment on the report to The College Fix.
“South Dakota’s public colleges and universities have the highest average ROI at $217,000,” said Cooper.
Minnesota was also ranked as one of the highest ranking states, with an ROI of $214,923. Cooper said the University of Minnesota-Twin Cities “offers several degrees with an ROI in excess of $900,000, including marketing, mechanical engineering, and finance.”
In third place is Iowa at $214,015.
“Iowa State University is by far the most valuable player in Hawkeye State. The school’s mechanical engineering program graduates nearly 500 students annually and provides an average ROI of nearly $925,000,” Cooper said.
In his summary, Cooper explained that “high ROI states commonly have a well-developed system of technical colleges. A preponderance of career-oriented majors in four-year schools also plays a role.
Hawaii, in contrast, ranked as one of the lowest states, with a negative ROI of $5,720.
The University of Hawaii did not respond to a request for comment from The College Fix.
“54 percent of graduate programs at Aloha State public colleges and universities have a negative ROI, meaning the typical student is worse off financially for enrolling,” Cooper said. “Even the state’s flagship school, the University of Hawaii at Manoa, has programs with negative ROI: The popular psychology major graduates hundreds of students a year, but leaves enrollees in worse shape by about $78,000.”
The foundation also reported on the nation’s “Most Valuable Programs.”
“These degrees from public colleges and universities provide excellent ROI and graduate enough students to make a significant impact on economic mobility in their states,” Cooper said.
The top-rated program in the nation is the University of Texas at Arlington nursing program. according to the foundation. In second place is the Ohio State University nursing program. And in third place is the Indiana University Bloomington business program.
“Twenty-three programs on the MVP list are in registered nursing, followed by 18 in business fields and 18 in computer science,” Cooper said. “Mechanical engineering and finance have a reputation as lucrative majors, but account for a smaller share of programs on the MVP list, perhaps due to the difficulty of these fields.”
Cooper offered three tips for universities to improve their ROI statistics.
One is to implement performance-based financing, which he claims has pros and cons, however, “Such a funding framework would provide institutions with a direct financial incentive to increase ROI.”
Another strategy Cooper recommends is to expand majors at high volume, arguing it could increase opportunities for a wide variety of students.
Finally, he recommends solving “the shortage of nurses”.
“With nursing being the ‘most valuable program’ in more than half of the state’s public university systems, expanding nursing schools into public universities is one of the most effective ways to increase aggregate ROI,” Cooper said.
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