Rethinking the ROI of the Degree To Focus On Investment—Not Just the Return

November 13, 2023


Jeff Selingo discusses the future of online education and the return on investment with our CEO, Fernando Bleichmar, in a Forbes article posted today.

Even as enrollment in much of higher education struggles to rebound from its pandemic lows— this fall is up 2.1% but graduate enrollment is flat and freshmen enrollment is down 3.6%—there is one bright spot: online education.  from partial numbers out so far shows that enrollment in online programs grew 7-10% this fall over last year.

The gap between the numbers is likely explained by another debate roiling higher ed: the value and return on investment (ROI) of a college degree. Most of the discussion about the ROI of college has been focused on the return—that is, what graduates earn on the job after they get their degree. What is not talked about as much is the “I” portion of the equation—what a learner invests in terms of both money and their time. As the cost of higher education increases, the denominator in the ROI—in other words, its cost—shouldn’t be ignored.

“The how much I have to pay cannot be prohibitive,” Fernando Bleichmar, CEO of AI», which assists universities in building and marketing their online programs,  “When you ask what matters to students in getting a degree, they say obviously the recognition of it. Will I be able to improve my life? Second, can I afford it? But third, how do I complete it on my own schedule as quickly as possible?”

Results from a recent Ipsos survey of new graduates from programs supported by AI» found that the average degree cost $16,600, and took them just a little over a year to pay back. The more than 900 graduates who took part in the poll and graduated from 25 different institutions saw their salary rise an average of nearly $14,000 after they earned their degree. Only half of students took out loans to finance their degree; and when they did, the average debt was $6,000, according to the Ipsos survey.

The survey results come as higher education faces a pivotal moment in its history. Questions about value and ROI are happening as undergraduate enrollment is about to experience a “demographic cliff,” when the number of high school students drops off later this decade. At the same time, AI and the changing nature of work demands that adults of all ages continue to get upskilled and reskilled to complement technology as well as stay one step ahead of it.

“There are enough students who want to advance their careers through education,” Bleichmar said on Future U. The problem, he said, is the lack of alignment with the degree programs and how they’re offered by most colleges and universities (usually in person). “Colleges have to offer the right programs, get students when they’re in need, help students get into the program, and get through the program.”

Given the demand for educational opportunities in the coming years, how higher education institutions set their tuition prices and the types of credentials they offer will become more important to prospective learners.

Read the full article here:

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