ROIs Compared For California Community & Certificate-Granting Colleges

Forbes

06-08-2025

A new statewide study of the economic return on investment provided by California's community and certificate-granting colleges shows that although some institutions offer a robust and rapid ROI for their students, many others provide little or no ROI, particularly in several underserved regions of the state.
Golden Returns: A Regional Look at the Return on Investment (ROI) of California's Community and Career Colleges analyzed how long it takes students to recoup their educational costs at 327 community colleges and certificate-granting institutions located across 12 of California's economic regions.
The analysis, which was conducted by the College Futures Foundation and The HEA Group, includes more than 1.2 million students attending 121 public, 186 for-profit, and 20 private non-profit schools statewide.
Using federal data from the U.S. Department of Education, including the College Scorecard, the researchers calculated what they call a Price-to-Earnings Premium (PEP). It's a measure of how quickly students can recover their net educational costs through their earnings after attending a given school.
To arrive at a PEP, the researchers first calculate a student's annual net costs of attendance at a specific college, which is the amount they have to pay after any financial aid grants they've been awarded are deducted. That net cost is then multiplied by the time it takes students to earn an associate's degree (two years) or certificate (one year).
Next, they compare the median earnings of former students 10 years after enrollment at a given school to the typical salary of a California high school graduate with no college experience ($32,476). The difference is considered the "earnings premium" for the institution.
Here is an example: At American River College, California's largest community college, students typically pay $9,256 out-of-pocket to earn an associate's degree in two years. They earn $40,162 per year—$7,686 more than the typical California high school graduate—after attending. With those additional earnings of $7,686 annually, graduates can recoup their $9,256 in net costs in just 1.2 years.
Of the top 25 institutions to offer the quickest ROI in the state, 23 were public California Community Colleges, all of which enabled students to recoup their net educational costs within just six months. (A complete list of institutions can be found here).
Skyline College, a public community college in San Bruno, was the top-ranked school, with its students earning a median of $55,702 ten years after enrollment. The top five schools were all located in the Bay Area or San Diego.
Public colleges were significantly more likely to offer strong ROIs compared to private nonprofit or for-profit institutions. For example, 48 out of California's 121 public community or career colleges (40%) showed their students recouping their costs within 12 months. However, a mere 11 out of 206 (5%) private non-profit or for-profit institutions yielded the same result, and 92 (45%) showed no economic ROI whatsoever.
There were large regional disparities in institutional ROIs. While 38% of institutions located in the Bay Area provided a positive ROI in under a year, only 6% in the Inland Empire region (an area in Southern California around Riverside and San Bernardino counties) did so, and more than a third of the institutions in that area provide no measurable ROI.
College Futures Foundation President and CEO Eloy Ortiz Oakley, who previously was Chancellor of the California Community Colleges, said the aim of Golden Returns was to give students accurate information about which colleges deliver real upward mobility and to help institutions understand whether they were or weren't delivering economic value.
'How institutions absorb this data and apply it to improve value for learners will give them a foundation to build from, especially as accountability takes center stage,' said Oakley, in a news release. 'While we support the overall intent of accountability, our priority is ensuring that the new framework is implemented in a way that doesn't create new barriers for California learners.'
Although the report shows that many of California's community colleges institutions and certificate-granting schools are serving students well in terms of economic mobility, it also points up major shortcomings. In too many parts of the state, students are still underserved — they do not have enough affordable, high-quality options for economically beneficial AA degrees and short-term certificates. In addition, private colleges in both the profit and nonprofit sectors lagged public institutions in terms of their ROI outcomes.
'The stark disparities we found should be a wake-up call for state policymakers and institutions. Students expect to be left better off, and colleges have a responsibility to ensure their programs provide genuine pathways to economic mobility,' said Michael Itzkowitz, President and Founder of The HEA Group.