Assuming most or all of you have a college degree or two and that your degree was the second or third biggest purchase of your life… Was your degree a good value? Do you feel like you got what you paid for? Anyone want a refund??? Are you still deriving benefits from the degree – or has the dividends shrunk over time? Do any of you wish you had shopped around more before attending the institution? What additional questions would you have asked? This presentation examines the rise of students as informed consumers.

1. The Rise of the Informed Consumer
and Student Return on Investment
Todd Bloom, Ph.D.
July 17, 2013

2. Welcome & Overview
The Higher Education Marketplace
Overview of Students’ College Attendance
Decisions
A Closer Look at Choices and Choice Process
A Closer Look at Information
Student Return on Investment Framework
2

3. The Higher Education Marketplace

4. Macro Factors
Demography
Fewer high school
graduates nationally
Demographic shifts
having different
impacts in different
parts of the country
Greater racial and
ethnic diversity
4
McGee, Jon, (2012). Disruptive Adaptation: The New Market for
Higher Education. Eden Prairie, MN: Lawlor Perspective.
Unemployment
Affected all types
of families during
recession
Continues to influence
economic behavior
and choices
Family
Income
Median income now
similar to 1996
Real income
declined for all
family types
Home Values
Source of financial
risk for many
families
An anchor to
mobility
Family Debt
& Savings
Families change
in habits during
recession
(saved more)
Behaviors are
changing, however

5. Student Demographics
5
National Center for Education Statistics. (2013). Projections of
Education Statistics to 2021. Washington DC: National Center for
Education Statistics.

6. 6
21.6 million
undergrads in U.S.
higher ed today.
38% enroll part-time 20% work full-time 38% graduate from 4 year
institutions in 4 years
Who is your student?
National Center for Education Statistics. (2013). Projections
of Education Statistics to 2021. Washington DC: National
Center for Education Statistics.
U.S. Census Bureau. (2012). School Enrollment and
Work Status: 2011. Washington, DC: Census Bureau.
National Center for Education Statistics. (2012). Digest of Education Statistics
2011. Washington, DC: National Center for Education Statistics.
National Center for Education Statistics. (2013).
Projections of Education Statistics to 2021. Washington
DC: National Center for Education Statistics.

7. Factors that Impact the Higher
Education Marketplace
What other macro factors do you believe are
dramatically influencing the higher education
marketplace and how?
Partner, Discuss, Share
7

8. Overview of Students’ College
Attendance Decisions

9. 9
“A consumer is making a choice to
maximize expected utility or minimize
expected cost.”
Hal R. Varian,
UC Berkeley Economist
people.ischool.berkeley.edu/~hal/Papers/sigir/sigir.html
When making
economic decisions…

10. College Attendance Decisions
Other important factors in a student’s decision
to enroll, such as:
10
The decisions of peersFamily expectations
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf

11. College Attendance Decisions
11
http://www.gallup.com/poll/163268/americans-say-graduates-
jobs-status-key-college-choice.aspx
41%
16%
37%
32%
22%
40%
43%
14%
40%
51%
13%
33%
0%
10%
20%
30%
40%
50%
60%
% grads able to get a
good job
% students who graduate Price of college/university
All respondents
<$3,000/mo.
$3,000-$7,499/mo.
>$7,500/mo.
In your opinion, which of the following is the MOST
important factor in choosing which college or university
to attend? (general population response)

12. College Attendance Decisions
12
http://www.gallup.com/poll/163268/americans-say-graduates-
jobs-status-key-college-choice.aspx
In your opinion, what amount of tuition is affordable for
ONE year of full-time study at an undergraduate college or
university, not including room, board, or books?*
2%
15%
18%
26%
10%
5%
3%
20%
9%
17%
8%
3%
1%
17%
28% 27%
11%
3%
1%
7%
21%
39%
12%
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
No amount of
tuition is
affordable
<$5,000 $5,000 -
<$10,000
$10,000 -
<$20,000
$20,000 -
<$30,000
$30,000+
All respondents
<$3,000/mo.
$3,000-$7,499/mo.
>$7,500/mo.
*Responses were open-ended and coded into the ranges

13. 13
College Attendance Decisions
Generally speaking, the higher the tuition at a college or
university, the better the quality of the education.
5 4 3 2 1
Strongly agree Strongly disagree
10% 13% 29% 20% 25%
http://www.gallup.com/poll/163268/americans-say-graduates-
jobs-status-key-college-choice.aspx

14. A Closer Look at Choices and the
Choice Process

15. 15
Students have more choices
than ever…
15
TRADE SCHOOL?
FOR-PROFIT?
LIBERAL ARTS?
ONLINE?
BLENDED LEARNING?
MOOC?
IN-STATE?
OUT-OF-STATE?
FOUR-YEAR?
TWO-YEAR?
PUBLIC?
PRIVATE?

16. Can people have too much choice?
Study #1: Jam Study
Researchers set up two tasting booths for jam –
one with 24 different flavors and one with 6
60% of customers went to the booth with 24
choices, and 40% went to the booth with 6
choices
30% of the customers with 6 options bought
jam, while only 3% of the customers with 24
options made a purchase
16
Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One
Desire Too Much of a Good Thing? Journal of Personality and Social
Psychology, 79(6), 995-1006.

17. Can people have too much choice?
Study #2: Essay Study
Students in an introductory college-level
course were given the option of writing an
extra credit essay.
Half the students were given a list of 30
possible topics, the other half a list of 6.
Students with the list of 6 topics were
more likely to write the essay than the
group given the list of 30.
Students given fewer choices for topics
wrote higher quality essays.
17
Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One
Desire Too Much of a Good Thing? Journal of Personality and Social
Psychology, 79(6), 995-1006.

18. Can people have too much choice?
Study #3: Chocolate Study
Customers chose chocolates either from a
display of 30 or 6.
Customers reported greater enjoyment
selecting from the display of 30 chocolates.
Later, however, customers who selected from
the display of 30 chocolates were more
dissatisfied and regretful of their choices than
the customers who chose from the display of 6
chocolates.
18
Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating: Can One
Desire Too Much of a Good Thing? Journal of Personality and Social
Psychology, 79(6), 995-1006.

19. Can people have too much choice?
Conclusions:
Having extensive choices in a trivial context can
be de-motivating (perhaps even more so in the context of
significant decisions).
The only context in which people are more
comfortable with extensive choice is when they have
previous experience with some of the options.
19
Iyengar, Sheena S., & Lepper, Mark R. (2000). When Choice Is Demotivating:
Can One Desire Too Much of a Good Thing? Journal of Personality and Social
Psychology, 79(6), 995-1006.

20. Can people have too much choice?
Information can add to the problems of choice
overload:
Too much
Varying quality
Too little
Trustworthiness
But high quality information can overcome the negatives
of choice overload.
20
www.nytimes.com/2010/02/27/your-money/27shortcuts.html?_r=0

21. A Closer Look at Information

22. Where do students turn for
information about college? People
22
Peers:
One study showed that conversations with friends
increase the probability of college enrollment. But if a
student’s preferred college isn’t popular with peers, the
student is less likely to enroll in that particular college.
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf
School Counselors & Admission Officers:
College choice can be shaped by data. In one
study, providing graduation data increased enrollment
by 15% in the college with the higher graduation rate.
www.aei.org/papers/education/k-12/filling-in-the-blanks/

23. Where do students turn for
information about college? Tools
23
Online tools:
Financial Aid Shopping Sheet: helps students and families
understand college costs
Net Price Calculator: helps students and families estimate their
out-of-pocket cost to attend college
College Confidential: helps students and families navigate the
admissions process
Payscale: helps students and families investigate the ROI of
colleges, degree programs, and professions
Naviance: complete ILP functionality for middle and HS with
college and career research, includes transcript sender

24. Another perspective (Tim Ranzetta)
24
1. Completion rates
2. Placement rates
3. Avg starting wages upon completion (with high and low ranges, too)
4. Avg student debt at completion
5. Student loan default rates
6. Student satisfaction based on: Would you recommend this institution's
program to a friend?
7. Job retention (did student still have job 6-12 months after completion?)
http://studentlendinganalytics.typepad.com/student_lending_analytics/2009/10/its-time-for-truth-in-educating

25. Default Rate – Not Grad Rate?
25
http://www.educationsector.org/sites/default/files/publications/Defaults_CYCT-F_JULY.pdf

26. Student Return on Investment
Framework

27. Assessing Return on Investment
27
What information should
students know when making
decisions about college?

28. Assessing Return on Investment
28
What do you think?
Please brainstorm in small groups:
• What are good measures of student return
on investment? Consider…
- Student Body Profile
- Finances & Financial Aid
- Learning Environment
- Non-cognitive Benefits
- Alumni Profile

29. Assessing Return on Investment
29
What factors are most important to the student?
Please discuss in small groups:
• Prioritize the factors – rank order
• Distribute 100 points among the factors
Report back to whole group

30. SROI
30
Are you interested in continuing this
conversation?
Hobsons is interested…
Assembling group of interested institutions in
developing an SROI index. Contact me for more
information.

31. Thank You!
31
Todd Bloom
Chief Academic Officer
Hobsons
tbloom@hobsons.com
(952) 807-5345
@Todd_Bloom

32. Assessing Return on Investment
32
What is the student body like?
Four-year graduation rate? 6 year graduation rate?
Average GPA?
Average GPA in major?
Retention rate?
Levels of student engagement?
Percent participating in international study?
Levels of civic engagement?

33. Assessing Return on Investment
33
What is the learning environment like?
How will I be supported?
– Will I have an advisor? How often will I meet with him/her
– What tools are provided to me to plan for my courses, track my
progress, and build a portfolio of performance artifacts?
– What is the effectiveness of the career placement service?
Is this a healthy place to learn?
– How safe are students on campus?
– Does the school value healthcare and lifestyle?

34. Assessing Return on Investment
34
How will I develop non-academic skills?
Will I have opportunities to develop skills like problem-solving
and conflict resolution?
Are mentoring and internship programs available?
Are students held accountable for their own outcomes?
What support is available for improving study and social skills?

35. Assessing Return on Investment
35
What are the costs, and what financial aid is
available?
Amount of tuition and fees?
Amount of need-based awards?
Amount of non-need-based awards?
Percent of students with loans?
Average student loan amount?
Loan default rate?

36. Assessing Return on Investment
36
What are the alumni like?
What does the first year compensation of graduates look like?
In the major I am considering?
Levels of satisfaction?
Percent who go on to graduate study?
Rates of career placement?
Levels of civic engagement?
Rate of alumni giving?

37. College Attendance Decisions
37
When making decisions about attending
college…
What other factors do students consider?
Partner, Discuss, Share