Alaska’s Cost of Higher Education, Ranked

Consortium Library Exterior, architect Roland H. Lane, University of Alaska, campus, Anchorage, Alaska, USA
Consortium Library Exterior, architect Roland H. Lane, University of Alaska, campus, Anchorage, Alaska.

Given the recent budget woes of the University of Alaska (UA) system and falling enrollment for nearly a decade, it is reasonable to wonder if earning a degree in Alaska is a sound economic investment for students. In other words, do Alaskan students leave their programs burdened with student loans and unable to pay them back? A recent ranking shows that most students graduating from Alaska’s public colleges pass a debt-to-earnings testindicating that they should be able to pay back student loans based on annual earnings.  

The Texas Public Policy Foundation released its first annual Economic Ranking of State Public Higher Education Systems for the 2019 to 2020 school year. State rankings are determined by the percentage of college graduates who complete their degrees at programs that pass a debt-to-earnings test. Programs are considered as a combination of major and degree at a particular university. 

 The ranking uses a debt-to-earnings test called the Gainful Employment Equivalent (GEE), which is an updated version of the Gainful Employment regulations introduced by the Obama administration to evaluate for-profit programs. Thus, the report states that the point of the GEE is to ask, “Had this program been at a for-profit college, would the Obama administration have tried to shut it down?” This metric evaluates students’ annual loan payments against annual earnings while factoring in the poverty line. The ranking uses data from the U.S. Department of Education’s Colleges Scorecard and the Integrated Postsecondary Education Data System. 

Alaska’s public colleges ranked fourth nationally, with 84 percent of graduates completing programs that passed the debt-to-earnings test. Five percent of graduates completed programs that may prove difficult to pay back student loans based on post-graduate earnings. Ten percent of Alaska graduates completed programs with too few graduates to publicize income data without jeopardizing student privacy.  

Unfortunately, the ranking does not consider any community college or two-year programs for Alaska, as the colleges are classified based on the highest degree awarded; thus, if any four-year degrees are awarded by an institution, it is classified as a four-year institution for the purpose of this rankingThough there are many colleges in Alaska that predominantly grant two-year degrees, such as Matanuska-Susitna College, Ilisagvik College, and Kenai Peninsula College, the vast majority are subsumed under a larger body like the University of Alaska, which means that their highest-degree awarded is that of the larger university, such as a bachelor’s degree. Further, Ilisagvik College, the only public college not subsumed by UA, offers a bachelor’s degree (in business administration), which classifies as a four-year university. Future rankings will likely consider the degree level of individual programs instead of the highest degree level awarded by the university. 

North Dakota, which ranked first, had 89 percent of graduates completing programs that passed the debt-to-earnings test, and eight percent of graduates that may struggle to pay back their student loans. The worst-performing state, Montana, only saw 45 percent of graduates completing programs that passed the debt-to-earnings test. 38 percent of graduates may struggle, and 13 percent of graduates completed programs that failed the debt-to-earnings test.  

Ranking fourth nationally for the percentage of graduates from programs that pass debt-to-earnings tests is good news: for the universities, prospective students, and parents. Though a student’s post-college earnings may largely depend on the program they completed, a high proportion of Alaska’s students are enabled to repay their student loans and do well for themselves. Alaska’s public universities should consider which degree programs offer their students the most profitable and satisfying careers when making decisions in order to preserve those programs which pay off for students and parents.  

Photo by Wonderlane, NC-BY CC0 1.0.