A college degree is one of the largest purchases of your life… Was your degree a good value? Do you feel like you got what you paid for? Anyone want a refund??? This presentation digs into consumerism and Student Return on Investment (SROI), and what it means for institutions.

1. The Rise of the Informed Consumer
and Student Return on Investment
June 3, 2014
Ryan N. Carroll, MBA
Director
Hobsons

2. Welcome & Overview
! The Higher Education Marketplace
! Overview of Students’ College Attendance
Decisions
! A Closer Look at Choices and Choice Process
! A Closer Look at Information
! Student Return on Investment Framework
2

3. ! The Higher Education Marketplace

4. Macro Factors
Demography
Fewer high school
graduates nationally
Demographic shifts
having different
impacts in different
parts of the country
Greater racial and
ethnic diversity
4
McGee, Jon, (2012). Disruptive Adaptation: The New Market for
Higher Education. Eden Prairie, MN: Lawlor Perspective.
Unemployment
Affected all types
of families during
recession
Continues to influence
economic behavior
and choices
Family Income
Median income now
similar to 1996
Real income
declined for all
family types
Home Values
Source of financial
risk for many
families
An anchor to
mobility
Family Debt
& Savings
Families change
in habits during
recession
(saved more)
Behaviors are
changing, however

5. Student Demographics
5
National Center for Education Statistics. (2013). Projections of
Education Statistics to 2021. Washington DC: National Center for
Education Statistics.

6. 6
21.6 million
undergrads in U.S.
higher ed today.
38% enroll part-time 20% work full-time 38% graduate from 4 year
institutions in 4 years
Who are your students?
National Center for Education Statistics. (2013). Projections of
Education Statistics to 2021. Washington DC: National Center
for Education Statistics.
U.S. Census Bureau. (2012). School Enrollment and
Work Status: 2011. Washington, DC: Census Bureau. National Center for Education Statistics. (2012). Digest of Education Statistics
2011. Washington, DC: National Center for Education Statistics.
National Center for Education Statistics. (2013).
Projections of Education Statistics to 2021. Washington
DC: National Center for Education Statistics.

7. Factors that Impact the Higher
Education Marketplace
What other macro factors do you believe are
shaping the conversation around the value of
college? How?
Partner, Discuss, Share
7

8. ! Overview of Students’ College
Attendance Decisions

9. 9
“A consumer is making a choice to
maximize expected utility or minimize
expected cost.”
Hal R. Varian,
UC Berkeley Economist
people.ischool.berkeley.edu/~hal/Papers/sigir/sigir.html
When making
economic decisions…

10. College Attendance Decisions
Other important factors in a student’s decision
to enroll, such as:
10
The decisions of peersFamily expectations
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf

11. College Attendance Decisions
11
http://www.gallup.com/poll/163268/americans-say-graduates-
jobs-status-key-college-choice.aspx
41%
16%
37%
32%
22%
40%
43%
14%
40%
51%
13%
33%
0%
10%
20%
30%
40%
50%
60%
% grads able to get a
good job
% students who graduate Price of college/university
All respondents
<$3,000/mo.
$3,000-$7,499/mo.
>$7,500/mo.
In your opinion, which of the following is the MOST
important factor in choosing which college or university
to attend? (general population response)

12. 12
College Attendance Decisions
Generally speaking, the higher the tuition at a college or
university, the better the quality of the education.
5 4 3 2 1
Strongly agree Strongly disagree
10% 13% 29% 20% 25%
http://www.gallup.com/poll/163268/americans-say-graduates-
jobs-status-key-college-choice.aspx

13. Fed’s College Ratings System
13
“We have not even begun to develop the college
ratings system yet, and we are only in the beginning
stages of soliciting input from a wide range of
stakeholders about the metrics that should or should
not be used in the ratings system…
No later than December of 2014, we’ll use the feedback
we receive to finalize the college ratings system.”
September 20, 2013, Secretary of Education, Arnie Duncan

14. Fed’s College Ratings System
14
Timeline:
! November 2013: 4 OPEN FORUMS
! December 2014: Final version
! 2015: Implementation
! 2018: Results tied to federal aid (about $150B)
Hobsons analysis and sharing opportunity

15. 15
What have we learned from
forums?
15
“We're talking about policy decisions
that can really shape higher education
for years, if not decades, to come.”
—Angel Cabrera, George Mason University
“It's not fair or reasonable really to rate
institutions on their performance without
consideration of the nature of their student
body.” —Peter McPherson, APLGU
“Unless students are given the
counseling . . . to use this data in
a way that best meets their
needs, their abilities, their
orientations, the best data in the
world is going to be of little to no
use.” —David Baime, AACC
“”The most critical information for
students or prospective students and for
policy makers is simple: how likely it is
that the student will succeed and how
much will it cost?”
—David Longanecker, WICHE
http://www2.ed.gov/documents/college-completion/11-13-13-gmu-forum.pdf and
http://www.insidehighered.com/news/2014/02/07/colleges-and-analysts-respond-
obama-ratings-proposal

16. Fed’s College Ratings System
16
Big Issues:
! Purpose – Accountability? Consumer
information?
! What should be measured?
! What should be considered successful
outcomes?
! How can the system drive change and
innovation?

17. ! A Closer Look at Choices and the
Choice Process

18. 18
Students have more choices
than ever…
18
TRADE SCHOOL?
FOR-PROFIT?
LIBERAL ARTS?
ONLINE?
BLENDED LEARNING?
MOOC?
IN-STATE?
OUT-OF-STATE?
FOUR-YEAR?
TWO-YEAR?
PUBLIC?
PRIVATE?

19. Can people have too much choice?
Study #1: Jam Study
! Researchers set up two tasting booths for jam –
one with 24 different flavors and one with 6
! 60% of customers went to the booth with 24
choices, and 40% went to the booth with 6
choices
! 30% of the customers with 6 options bought
jam, while only 3% of the customers with 24
options made a purchase
19
Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One
Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6),
995-1006.

20. Can people have too much choice?
Study #2: Essay Study
! Students in an introductory college-level
course were given the option of writing an
extra credit essay.
! Half the students were given a list of 30
possible topics, the other half a list of 6.
! Students with the list of 6 topics were
more likely to write the essay than the
group given the list of 30.
! Students given fewer choices for topics
wrote higher quality essays.
20
Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One
Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6),
995-1006.

21. Can people have too much choice?
Study #3: Chocolate Study
! Customers chose chocolates either from a
display of 30 or 6.
! Customers reported greater enjoyment
selecting from the display of 30 chocolates.
! Later, however, customers who selected from
the display of 30 chocolates were more
dissatisfied and regretful of their choices than
the customers who chose from the display of 6
chocolates.
21
Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One
Desire Too Much of a Good Thing? Journal of Personality and Social Psychology, 79(6),
995-1006.

22. Can people have too much choice?
Conclusions:
! Having extensive choices in a trivial context can
be de-motivating (perhaps even more so in the context of
significant decisions).
! The only context in which people are more
comfortable with extensive choice is when they have
previous experience with some of the options.
22
Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating:
Can One Desire Too Much of a Good Thing? Journal of Personality and Social
Psychology, 79(6), 995-1006.

23. Can people have too much choice?
Information can add to the problems of choice
overload:
! Too much
! Varying quality
! Too little
! Trustworthiness
But high quality information can overcome the negatives
of choice overload.
23
www.nytimes.com/2010/02/27/your-money/27shortcuts.html?_r=0

24. ! A Closer Look at Information

25. Where do students turn for
information about college? People
25
Peers:
One study showed that conversations with friends increase
the probability of college enrollment. But if a student’s
preferred college isn’t popular with peers, the student is less
likely to enroll in that particular college.
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf
School Counselors & Admission Officers:
College choice can be shaped by data. In one study,
providing graduation data increased enrollment by 15%
in the college with the higher graduation rate.
www.aei.org/papers/education/k-12/filling-in-the-blanks/

26. Where do students turn for
information about college? Tools
26
Online tools:
! Financial Aid Shopping Sheet: helps students and families understand
college costs
! Net Price Calculator: helps students and families estimate their out-of-
pocket cost to attend college
! College Confidential: helps students and families navigate the
admissions process
! Payscale: helps students and families investigate the ROI of colleges,
degree programs, and professions
! Naviance: complete ILP functionality for middle and HS with college
and career research, includes transcript sender
! The College Board: MyBigFuture

27. Default Rate – Not Grad Rate?
27
http://www.educationsector.org/sites/default/files/publications/Defaults_CYCT-F_JULY.pdf

28. ! Student Return on Investment
Framework

29. Assessing Return on Investment
29
What information should
students know when making
decisions about college?

30. Assessing Return on Investment
30
What do you think?
Please brainstorm in small groups:
• What are good measures of student return
on investment? Consider…
- Student Body Profile
- Finances & Financial Aid
- Learning Environment
- Non-cognitive Benefits
- Alumni Profile

31. Assessing Return on Investment
31
What factors are most important to the student?
Please discuss in small groups:
• Prioritize the measures
• Share Top 3
Report back to whole group

32. Priority Measures
32
Discuss the following:
• The “Top 3” measures
• Feasibility of reporting the “Top 3” measures
• Cautions and concerns associated with the “Top 3”
and reporting these measures to prospective
students
Share 1 key point with the whole group

33. Next Steps
33
How will we continue this discussion?
How will we move from discussion to action?
How can Hobsons help?

34. SROI
34
Are you interested in continuing this
conversation?
Hobsons is interested…
Assembling group of interested institutions in
developing an SROI index. Contact me for more
information.

35. Thank You!
Ryan N. Carroll
Director
Hobsons
Ryan.Carroll@hobsons.com
513) 985-6003