Blog Published August 26, 2024 · 2 minute read
2024 Price-to-Earnings Premium and Economic Mobility Index
Emily Rounds & Chazz Robinson
The number one reason students pursue a college degree is to gain financial security and increase their employability. An undergraduate education is one of the most expensive investments a person will make in their lifetime, and with millions in taxpayer dollars flowing to institutions, it’s imperative for students, their families, and policymakers to understand if schools are offering a return on their investments. Third Way’s Higher Ed Value Metrics were developed to help us understand this by measuring value and return on investment at four-year institutions across the country.
Get the takeaways from the 2024 Price-to-Earnings Premium and Economic Mobility Index below, and head to www.higheredvaluemetrics.org to find the full data and interactive dashboards.
Price-to-Earnings Premium
The Price-to-Earnings Premium (PEP) measures the value that higher education institutions provide their students by looking at the net price the average student pays out-of-pocket to obtain an academic credential relative to the additional amount they earn by attending that institution in the first place.
In 2024:
- Public colleges dominate the top 10 spots on the PEP, and private non-profits secure top spots in the PEP for low-income students.
- 80% of institutions prepare low-income students to recoup tuition in fewer than 10 years.
- $755 million taxpayer dollars fund the lowest 25 performing institutions.
- For-profit colleges are a risky bet for students—66% either only deliver ROI 26 years after graduation or do not deliver ROI at all.
Economic Mobility Index
The Economic Mobility Index (EMI) assesses institutions on how well they serve low-income students and provide them with a return on their investment. The metric uses the results of our low-income PEP analysis and multiplies institutions’ comparative rank by the percentage of Pell Grant recipients that they enroll.
In 2024:
- California, Texas, and New York lead the EMI for the third year in a row. Of the top 25 schools on the EMI, 76% are based in California, Texas, and New York.
- Minority Serving Institutions excel at providing economic mobility for their most vulnerable students. In Tier 1 of the EMI, there are 96 Hispanic-Serving Institutions, 63 Asian American and Native American Pacific Islander-Serving Institutions, and 8 Historically Black Colleges and Universities.
- Public institutions dominate the EMI—186 of the 270 (69%) of the spots in Tier 1.
- Institutions that do well on the EMI have higher enrollments of Pell recipients. The average percentage of Pell students at the schools in Tier 1 is 41%.
