College Pays Off, but Not Equally

In California, a college degree often pays off—but not equally for all students. A new analysis from California Competes finds that the return on investment for bachelor’s and associate degrees varies widely across the state.

The report defines ROI as the economic premium of a college degree minus its costs. It measured how much more a graduate earns over 10 years compared to a typical high school graduate among those employed full-time, then subtracted the average net cost of completing a degree at a public institution.

Over all, 78 percent of bachelor’s degree holders and 62 percent of associate degree holders in California see a positive ROI within 10 years of graduating. However, where a student lives shapes those outcomes: The share of bachelor’s degree holders with a positive ROI is higher in coastal, urban regions and lower in inland areas, ranging from 70 percent in the Inland Empire to 84 percent in the Bay Area.

That pattern shifts for associate degrees. In the Bay Area, just 55 percent of associate degree holders see a positive return, compared to 67 percent in the Inland Empire.

David Radwin, principal researcher at California Competes, said the variation underscores the need for stronger alignment between higher education and regional labor markets, noting that comparable college costs statewide mask significant differences in job opportunities and earnings potential.

“One of the things we found in this brief is that the cost of education is not very different across regions,” Radwin said.

Postgraduate earnings and opportunities are a different story.

“We know in the Bay Area technology is one of the big employers—and that those jobs pay really well,” Radwin said. “But there aren’t as many of those jobs in the Inland Empire or in places like Riverside and San Bernardino.”

“There aren’t Google or Meta or tech companies at the same scale or concentration, so jobs in those regions aren’t going to offer the same high salaries as in the Bay Area,” he added.

Aligning education and jobs: The report notes that strengthening ROI starts with state and institutional leaders prioritizing affordability. In particular, that means expanding access to financial aid that helps cover living costs, not just tuition.

“Policymakers should be paying attention to increasing earnings and reducing costs,” Radwin said. “That way graduates can see the return on their investment in college and get stronger economic returns.”

Radwin also pointed to the need to streamline support for student success, including access to public benefit programs such as CalFresh, CalWORKs and Medi-Cal.

“Right now, it’s very difficult for students to access these programs, but it doesn’t have to be,” Radwin said. “[State policymakers] should streamline the application and renewal processes.”

The report also highlights the need to strengthen the link between higher education and regional employment. That includes more intentional alignment between college programs and local labor market demand, starting with better data collection on how students fare after leaving college.

Radwin said California Competes is backing SB 1054, introduced by California state senator Christopher Cabaldon, which would expand state data collection to include employees’ hours worked, job locations and occupations—providing a more complete picture of graduates’ employment outcomes.

“That, in turn, would better equip students, colleges and policymakers with the information needed to create, maintain and expand high-value programs that lead to good jobs,” he said.

At the federal level, the One Big Beautiful Bill Act introduces new program-level accountability metrics, set to take effect July 1.

Radwin added that institutions should deepen partnerships with employers, including through internships and paid work-based learning opportunities.

“We need to do more of this work. It’s difficult and takes time, but it’s critical for helping students transition into the workforce,” he said.

Transparency in outcomes: Radwin said the findings point to a broader need for colleges to be more transparent about the economic returns associated with different majors and career pathways.

“Institutions have a lot of responsibility for communicating this information,” Radwin said. “They need to do a better job of informing students early on—before they matriculate or at least within the first year—so they can make choices that align with their goals.”

But Radwin said that transparency is about equipping students with information, not steering them toward specific careers.

“And if one of those goals is to earn a certain income, students should know what graduates from their program are earning, whether in their first job or over time,” he said.

“Not everyone needs to make a million dollars,” he added. “There are high-social-value careers—like teaching, social work or ministry—that aren’t particularly well paid. But those are decisions students should make with clear information.”

In Inside Higher Ed’s main 2025 Student Voice survey of more than 5,000 undergraduates, just a fraction of respondents—12 percent—said they know detailed outcomes data for their program of study. Just 14 percent indicated this information is readily available.

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