DO LIBERAL ARTS COLLEGES OFFER A GOOD RETURN ON INVESTMENT?
The following fields of study are typical of most liberal arts colleges. Of course, there are minor variations in specific curricula, requirements, and the like. Nonetheless, “liberal arts” has a pretty consistent definition:
1. An analysis of the interplay between literature, art, and history.
2. Cultural and religious studies, with specific options for distinct geographic or temporal domains. Examples include Asian Studies, Anthropology, Classical civilization, Islamic culture, Medieval Theology, and so on.
3. Science, math, and technology overview.
As with any ROI examination, a focus on supply and demand is crucial. Starting with supply: according to Schools In The USA, there are over 500 liberal arts colleges in the U.S. DataUSA tells us that these colleges turned out about 301,000 degrees in 2015, and it will be assumed that there is a steady, though moderate growth in degrees granted every year since then. Assume that in 2016 there were about 310,000 degrees and in 2017 the number of degrees increased to about 320,000. This is only a little bit over 6 percent growth, making the total number of liberal arts degrees granted from 2015 to 2017 roughly 930,000.
Assume a simplistic $15,000 per year and an average four years to get a bachelor’s degree. Taking the number of degrees estimated above, that comes to $15,000 x 930,000 = $13,950,000,000. This is a ballpark total cost of those degrees. Though tremendous at face value, remember that this number is an estimate and is offset by the alleged benefit of a liberal arts education. Given this cost in recent years, it is prudent to look at the payoff.
Given the wide variety of liberal arts subjects and specialties, any average stated annual salary or liberal arts ROI calculation will necessarily be painfully generalized. Having said that, assume an average annual salary of $55,000. Next, remember that not every college graduate will get a commensurate job. Being optimistic, assume 97 percent of those liberal arts majors get a job with pay proportionate to their education level. This is a percent-adjusted $53,350 per degree, or $49,615,500,000 per year. At first glance, this seems nice, since it beats the $13.9 billion total cost of degrees, and this is just within one year. Even allowing that other expenses and savings will eat up 95 percent of the average graduate’s income, that still leaves $2.48 billion per year to levy against college expenses. In six years, this 5 percent “profit margin” exceeds average college cost. Also, note that future income of liberal arts graduates will very likely grow while the cost of education is fixed with the attainment of a Bachelor’s degree.
A liberal arts ROI is generally positive enough to justify the cost and effort. It may be argued that this is wrong since a more profitable career track such as petroleum engineering or investment banking will obviously beat a typical liberal arts degree earning power. However, students and adults are not equal in their capabilities and ambitions. A liberal arts degree remains an impressive leg up for many.
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