The unintended consequences of linking earnings and college performance

Written by: Donald Heller

Primary Source: The Dean’s Blog

Artist’s rendering of the new Theatre School building at DePaul University (Photo courtesy of DePaul University)

In one of my posts on President Obama’s college costs proposals, I described how the president is proposing to link eligibility for federal financial aid to the earnings of the graduates of colleges and universities. The general idea is that only those colleges that produce graduates who earn reasonable salaries should benefit from federal financial aid.

Last week I attended the dedication of the new Theatre School building at DePaul University (shown above), where I am a trustee. The building, designed by renowned architect Cesar Pelli, is a beautiful and functional space. The dedication was a wonderful event that included short performances by students in the acting programs at the Theatre School.

As I watched the performances, I thought about the students and their future careers. I imagine most of them aspire to acting careers, either on stage or television, or in movies. And I am sure most of them know the odds that they will ever make large salaries working as an actor are stacked against them, even though the DePaul Theatre School has an excellent reputation. Yet they are all there, paying tuition at a private university – many with the support of financial aid from the federal government, I would assume – in order to achieve their dream.

Data from Actors’ Equity, the union for stage actors, show that in the 2011-12 season, the median earnings of its members was $7,256. Only 6 percent of its members, of 1,186 actors, earned $75,000 or more in that year. Granted, many members of Actors’ Equity work part-time and hold down other jobs, but nevertheless, the data demonstrate that acting is not a particularly lucrative career, other than for those at the very top of their profession. Economists Robert Frank and Philip Cook documented this trend in their book, The Winner-Take-All Society.

Regardless of how much money actors make, it is hard to argue that theater does not make an important contribution to our society. The same can be said about other arts – music, dance, and the visual arts. And the same is true about other professions in our economy, whether it be child care workers, social workers, members of the clergy, and yes, even some teachers.

Yet, the great majority of people in these professions make relatively little money. So if we are going to start evaluating colleges on the earnings of their graduates, with those schools producing alumni with higher salaries deemed as “better,” and those with lower salaries, “worse,” then we are going to devalue institutions that produce many graduates in these fields. More importantly, we could be denying their students access to federal financial aid, a critical subsidy to many of them, especially considering the relatively low wages they receive once employed.

Before President Obama and Congress plunge head first into this aspect of college accountability, I hope they will think about the unintended consequences of these measures. Our society will be poorer, in more ways than one, if we discourage students from pursuing careers that add to the richness of our lives, even though they may not be richly compensated.

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Donald Heller
Donald E. Heller is Dean of the College of Education and a professor in the Department of Educational Administration at Michigan State University. Prior to his appointment in January, 2012, he was Director of the Center for the Study of Higher Education and professor of education and senior scientist at The Pennsylvania State University. He also has held a faculty appointment at the University of Michigan. His teaching and research is in the areas of educational economics, public policy, and finance, with a primary focus on issues of college access and choice for low-income and minority students. He has consulted on higher education policy issues with university systems and policymaking organizations in California, Colorado, Kansas, Massachusetts, Michigan, New Hampshire, Tennessee, Washington, Washington DC, and West Virginia, and has testified in front of Congressional committees, state legislatures, and in federal court cases as an expert witness. Before his academic career, he spent a decade as an information technology manager at the Massachusetts Institute of Technology.
Donald Heller

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