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CSU and UC Are a Better Value Than Universities Nationwide

Jacob Jackson November 23, 2016

With college application season underway, the US Department of Education’s yearly scorecard helps prospective students and their parents by providing information on the costs, graduation rates, and student debt associated with individual colleges. Since last year, the scorecard has also included wages for former students based on federal tax data. We reported on how to interpret the earnings measure in an earlier blog post.

The scorecard also highlights 26 affordable universities with good outcomes in the form of relatively high earnings. California’s public universities do quite well: eight California State University (CSU) and University of California (UC) campuses make the list. This list uses a school’s average net price (its tuition, fees, room, board, and other expenses minus the average amount of grants and scholarships) and the typical student’s earnings 10 years after enrolling to estimate how much “bang for their buck” students get in terms of future income.

In fact, almost all CSU and UC campuses provide higher-than-average incomes given their net price when compared to four-year colleges nationwide. California’s private four-year colleges show mixed results, as they generally have higher net costs; about half have below-average earnings for their price.

These results speak to the relative success of CSU and UC compared to other universities in the nation. However, it is important to note that this isn’t the whole story: the net price and income data are only collected for students who received some form of federal aid. While this represents a majority of students in public universities, it can represent a smaller fraction of students from private universities in the state.

California’s public universities have a couple built-in advantages. The state’s generous financial aid program provides grants that cover tuition for qualifying low-income students and, in some cases, help pay for living expenses and books—substantially reducing the net price for those students. Also, workers in California earn more than those in other parts of the country, and the concentration of higher-paying jobs in California (such as in the tech industry) may contribute to the relative success of the state’s students. However, many private colleges in the state are associated with low median salaries, suggesting it’s not just location that matters.

California also likely benefits from high-quality institutions. Most UCs are highly ranked nationally, and as PPIC has shown in other research, CSUs have relatively good six-year graduation rates when compared to similar institutions. This is important, as the scorecard reports the incomes of students who attended a university, regardless of whether they graduated. College graduates tend to make more than non-graduates, so institutions with better graduation rates are more likely to produce workers with higher incomes.

While the scorecard can help students decide which college is right for them, it also shows students that the economic returns to a college degree can be had for a reasonable price in California.

For those interested in diving deeper into this finding, this chart illustrates the relationship between net price and the yearly income of students after 10 years. Each dot is a university. The CSUs (orange), UCs (dark teal), and in-state private universities (light teal) are marked alongside other universities in the nation (light grey). Nationwide, higher net prices are associated with higher earnings. This isn’t shocking, as we generally associate higher prices with higher-quality universities, which may net students a higher future income. The diagonal line shows typical earnings for a given net price. Universities above the diagonal line have higher-than-average earnings given their net price, and universities below the line have lower-than-average earnings.

Learn more

Read “What the New College Scorecard Can—and Can’t Tell You”
Visit the PPIC Higher Education Center

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