Conventional colleges may be overpriced and underperforming, but those 19th century methods of teaching and learning are being challenged by 21st century alternatives.
Case in point: the Harvard/MIT EdX model. Harvard and the Massachusetts Institute of Technology have announced they're putting 60 million dollars into an open-source online education program. A list of courses will be announced this summer and will be implemented in the fall, but the bottom line is that people all over the world will be able to study subjects taught at MIT and Harvard for free, and get "certification" -- though not an actual diploma (yet) -- if they pass certain tests.
This isn't the only such venture. Minerva University -- a new school that aims to be the online Ivy, with involvement by former Harvard President Larry Summers and former Senator (and New School President) Bob Kerrey -- just raised $25 million in startup capital.
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PayScale, a Seattle data firm, examines the links between pay and variables like colleges and majors. Its analysis, which also ignores dropouts but accounts for students who take longer to complete their degrees, finds an average yearly return of 4.4% for degrees from 853 schools. That assumes students get financial aid, as most do.
Returns vary sharply; they are negative for more than 100 schools and over 11% a year for ones like Harvey Mudd College in California, the Georgia Institute of Technology and the University of Virginia. Dartmouth, Harvard, Stanford and Princeton are over 10%, but so is Queens College in New York—where state residents pay just over $5,000 a year in tuition, versus about $41,000 for Stanford.
The worst returns tend to come from schools whose programs focus on nursing, criminal justice, sociology and education, says Katie Bardaro, an analyst at PayScale. The best returns are often from schools with strong engineering, computer science, economics and natural-science programs.
There's a flip side: "It's a lot harder to successfully graduate from those engineering programs," says Ms. Bardaro.
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The riskiest investment is a high-cost liberal-arts college that lacks a strong brand name and doesn't offer much aid, says Mr. Schneider. By contrast, a high-cost school with a strong brand and plenty of aid may be a "good buy."
PayScale's Ms. Bardaro says students should research carefully the pay they are likely to secure before deciding how much to spend on college. After all, tuition and fees have increased 184% in 20 years after accounting for inflation, but wages for college grads have risen just 9%, according to Labor Department data.
