What Is The Return On Investment From A Liberal Arts Education?

The sticker price for a private liberal arts college degree has never been higher. The average listed cost of attendance for on-campus students at the 190 such institutions we reviewed—including tuition, fees, room and board, and books—hit $58,000 in 2019–20, with some institutions charging as much as $77,000 per year. With scholarships and tuition discounting, the average net cost drops to $26,000 per annum, a still-sizeable commitment for all but the wealthiest families. Can these institutions, a distinctly American invention, prove their worth against demands for more focused preparation for the workforce?

Liberal arts colleges are forced to address overall skepticism of higher education, skepticism not necessarily of their making. A recent study on career readiness shows that only 42% of employers express satisfaction with college graduates’ written and verbal communication, just 33% believe that college graduates are ready for leadership, and a paltry 21% credit college graduates with intercultural fluency.

Students with a traditional liberal arts education have a demonstrated job-market advantage. Foreign language proficiency not only yields a salary premium; demand for bilingual employees is exploding, including in high-prestige sectors of the economy. A recent study by the Center on Education and the Workforce showed that while liberal arts college graduates may be disadvantaged in starting salary, that changes over their careers. Noting that there are many variables, the study still found that “the median ROI of liberal arts colleges is nearly $200,000 higher than the median for all colleges. Further, the 40-year median ROI of liberal arts institutions ($918,000) is close to those of four-year engineering and technology-related schools ($917,000), and four-year business and management schools ($913,000).”

Why do liberal arts colleges overall provide such a return on investment? According to a 2019 Bureau of Labor Statistics survey of baby boomers, the average individual can expect to change jobs 12 times over 34 years in the workforce. Highly specialized degrees and pre-professional educations often fail to equip graduates with the intellectual agility and critical thinking skills that a robust liberal arts education cultivates, and these are the exact skills that employers look for. A recent Job Outlook survey from the National Association of Colleges and Employers found that 82% of employers seek employees with excellent written communication skills, 81% look for workers with problem-solving skills, and 72% prioritize hiring employees with analytical/quantitative skills.

While an education that prepares students with competency in one focused area may provide an obvious point of entry into the workforce, it does not do well at preparing graduates for growth and the ever-evolving demands of the knowledge economy, the fifth—or tenth—job over a long career Richard Ekman, president of the Council of Independent Colleges, observes, “We know these assertions are true because CEOs consistently recite them, the leaders in every field have been educated in this way, and studies of the lives of recent graduates confirm these patterns.”

Not every liberal arts college lives up to its heritage, but in general, they do a better job of providing the foundation for