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ROI in education shouldn’t be a mystery; students deserve transparency

ROI in education shouldn’t be a mystery; students deserve transparency

The Hindu
Thursday, January 9, 2025 11:25 AM GMT

Indian students should be empowered to make informed decisions about education ROI through transparency and accountability in higher education.

The average Indian parent’s greatest dream is a successful life for their child. They are even willing to spend their life’s savings for an education, in hopes of economic and social mobility. With education loans becoming easier to procure, a foreign education is not a distant dream anymore. However, the rising cost of education can still make a heavy dent in family finances. 

Does this investment always pay off? Not always and not necessarily in the ways that we expect. Return on Investment (ROI) in education, if simply put, is the expected financial return and personal growth from education spending. Its calculation, however, is not so simple. Yet it is perhaps the most important consideration for the average Indian household when deciding to send their child to study abroad or even in high cost institutions in India. 

The U.S. is a strongly preferred study abroad destination for Indian students. Of the 13.3 lakh Indian students studying abroad in 2024, over 3.3 lakh are in the U.S.. Reports show that “the US Mission to India issued more visas to Indian students in 2023 than it had issued in 2018, 2019 and 2020 combined.” This increase in Indian enrolments is being attributed to two major factors: the deteriorating U.S.-China relations and the dip in domestic enrolments. 

To understand what makes ROI important, one must understand why American students are turning away from higher education in the U.S., which arguably has some of the best institutions in the world.

Rising student debt and economic uncertainty is making American students question the value of college education today, and thus, ROI is becoming an ever important criteria for budget constrained students, especially in STEM and Management fields. Discussions around the value of education started around the time of the recession of 2007-2009. That was when college rankings came up with “Best Value Colleges” and started including components that measured salary outcomes and job placement rates. Some of the early adopters included Georgetown University’s Center on Education and the Workforce (CEW), Forbes, and The Wall Street Journal. Today almost all rankings include the value component.

Are these “Best Value Rankings” really able to capture the true ROI for an Indian student? The reality is that ROI in education is far more complex than a simple calculation of costs versus median starting salary. Much of it hinges on the student’s unique circumstances.

When funds are not a constraint, knowledge for the love of knowledge also has value and so do the rich experiences and the international networks that give you long term success. But for the average Indian, many of whom are first generation college goers, ROI should be the top consideration to ensure that the college dream does not turn into a financial nightmare. 

Read full story on The Hindu
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