Despite the individual benefits of completing a postsecondary education, the value to taxpayers of subsidizing higher education is becoming increasingly threatened.

Student debt has, and continues, to rise dramatically, fueled in part by ever increasing government-subsidized student loans. Taxpayers' direct costs for Michigan colleges and universities continue to stretch the state budget. It is becoming clear that neither students nor taxpayers are getting a good return on their investment.

This problem has several reinforcing causes that must be addressed to achieve quality career outcomes for students and a skilled workforce.

First, consumers lack access to clear data on the success rates for specific programs at specific institutions. While young people and their families are making a key decision and investment in their futures, they lack quality buying information. Just try to secure data providing the graduation rate, employment rate, earnings and post-graduate education enrollment data for any field of study or program at the local college or university of your choice. I wish you luck and hope you have a great deal of persistence and patience.

The second cause is the age-old myth that a person must have at least a four-year degree to secure a rewarding and financially secure career. Multiple studies suggest that the lack of a postsecondary credential is related to a poverty-level subsistence, but those studies also indicate that vocational credentials and two-year associate's programs are viable options. These usually cost far less, for students and taxpayers.

Third, the disjointed oversight and funding stream for higher education does not lend itself easily to designing accountability structures for those institutions. State universities are funded through numerous federal financial aid programs, including student loans, state budgets, tuition and fee payments, and endowments and grants that often have differing data gathering and reporting requirements.

The culture engendered by this funding "system" certainly has not emphasized accountability or cost containment and will not without systemic changes.

Identifying the problems is the easy part, but solutions lead change and make a difference. So, what needs to be undertaken or changed to improve the quality of student outcomes and cost consciousness about higher education?

The following steps would dramatically impact this use over the next few years:

  • Consumer-friendly reporting by each institution — by major — of the graduation rate (within five years), placement rate in jobs directly related to the program and average earnings of those jobs/careers, and the grad school acceptance rate. This data must be contemporary as labor markets shift, so reporting should be at minimum for two- year cohort periods if not annually.
  • Institutions should publish realistic cost of attendance data that provides prospective students the cost to reach graduation of tuition, books/fees and dorm or living expenses. Consumers should know the total cost of their goals before they select an institution and career objective.
  • The governor and Legislature, for the sake of taxpayers, should provide more oversight of state-funded universities. The economic dashboards emphasized by Gov. Rick Snyder are a good start, but the data generated is far too general. The Legislature should require state-funded institutions to report the information above, and their return on investment (ROI) in each program. ROI must be measured by the total cost to graduate a class of students that year and must compare that cost with previous years.

Armed with this information, consumers of higher education would become better shoppers and put positive competitive pressure on state universities to focus on providing them with what they really need: a cost-effective way of obtaining a college degree and the employment skills that come with it.

Once this begins to happen, we should see the cost of college begin to fall and the graduation rate of students simultaneously begin to rise — increasing higher education's return on investment and putting that ROI in the sights of more students.

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Paul Mitchell is the former CEO of Ross Education, a private workforce and career training group that operates in five states. The Mackinac Center for Public Policy is a research and educational institute headquartered in Midland, Mich. Permission to reprint is hereby granted, provided that the author and the Center are properly cited.