Kudos to the Strada Education Foundation for its brand new State Opportunity Index, designed to gauge how well post-secondary education in each state prepares graduates to join the workforce and earn a living wage. The index establishes a baseline for how states are doing in five priority areas: clear outcomes, quality coaching, affordability, work-based learning, and employer alignment.
The resource begins with a state-by-state return on investment (ROI) calculation for graduates who earn bachelor’s and associate degrees. To determine the ROI, the index compares the cost of obtaining a degree—including paying off student loans within ten years of completion—to the individual earnings that a graduate can expect based on the type of degree they earn.
At the top of the heap, 78 percent of degree-earners in California and New York can expect a positive ROI within ten years of completion. The lowest is Idaho, at 54 percent. Bachelor’s degree holders can generally expect a quicker positive return than their peers with associate degrees, despite the substantially cheaper price tag of the latter. Only three states—New Mexico, Vermont, and Wyoming—show a stronger ROI for associate degree earners than for those who earn bachelor’s degrees. Workers who are making at least $50,000 per year are likely to experience positive ROI in even the most expensive state. Workers earning less than $30,000 per year, on the other hand, will not experience positive ROI no matter how inexpensive their postsecondary education was, as their earnings do not exceed those of a high school graduate with no degree.
The bulk of the index then looks at those five priority areas and provides a rating for each.
The “clear outcomes” priority examines whether the data are available to allow high school students to know what their post-secondary education journey will look like—trade school, university, certification, apprenticeship, military service, etc.—and what types of jobs each option could lead them to. The biggest winners here were states whose data sources connected education and employment across numerous agencies and were (or were becoming) publicly available.
The “quality coaching” priority asks whether college students received timely information and guidance to help them navigate their chosen pathway. Data come from a national survey of college graduates from 2020 to 2023. On the upside, students who reported receiving coaching saw measurable benefits from it. On the downside, all states individually and the nation as a whole ranked very low in providing employment-related coaching to post-secondary students.
The “affordability” priority looks to see how well states eliminate cost as a barrier to postsecondary education. These data were calculated based on the number of hours a college student would need to work annually—while earning their state’s median wage—to cover the net price of their education. California and Washington are the most affordable; Alabama, Georgia, Louisiana, Montana, New Hampshire, North Dakota, Ohio, Pennsylvania, and South Dakota are the least. These outcomes, like the ROI analysis, are driven mainly by the median incomes in the various states.
“Work-based learning” describes the number of students who completed an internship (paid or unpaid) during college and the benefits of those internships. Data again come from that big national survey. Graduates who complete a paid internship are much more likely to end up with a first job that requires their degree (73 percent), compared to those who did not (44 percent). They are also more likely to be satisfied with their first job and their progress toward their long-term career goals, compared to students who completed an unpaid internship or no internship at all. Internships were more prevalent for bachelor’s degree students (approximately 50 percent) than for associate degree students (approximately 25 percent). Associate degree students were more likely to have unpaid internships, while their bachelor’s degree peers had paid internships.
Finally, the “employer alignment” area scores each state on the supply/demand ratio of workers for a variety of high-demand and high-wage jobs, including cybersecurity, health care technician, software development, and engineering. The methodology for this important area is restrictive, focusing only on jobs that require bachelor’s degrees (and fewer than three years of experience) and only on bachelor’s degree earners who have these jobs. Additionally, the analysts aren’t able to factor in graduates who move to another state in pursuit of a job after earning their degree or who live in one state but work remotely in another. Since this area is restricted only to talent supply and demand data within a single state, it is probably not surprising to see low grades for all of them.
For each priority, the index gives a raft of recommendations aimed at helping states climb the rankings. My colleague Jessica Poiner has taken a deep dive into Ohio’s ratings and what they mean. All states could benefit from taking these findings and recommendations seriously.
Yet the index itself has room for improvement: expanding its focus to include non-college pathways to opportunity (such as military service and credentialing), looking at how K–12 education impacts these priority areas, and an examination of how remote work figures into economic opportunity, to name just three.
SOURCE: Strada Education Foundation, “State Opportunity Index: Strengthening the Link Between Education and Opportunity” (May 2024).
