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Part of Western Governors University

WGU Advocate We increase student return on investment

WGU serves students who may not otherwise attend or succeed in college.

For millions of working adults, the dream of pursuing a college education can only become a reality once the boundaries of cost, time and place are removed. Overcoming these challenges is the heart of the WGU idea. It is why we designed competency-based-education with business leaders, and it is why our students report outstanding salary and employment outcomes, despite paying an average of 1/5th the cost of the typical U.S bachelor’s degree (see “Degree Cost” below).

 

total wgu students chart

Student Outcomes:

Degree cost.

WGU’s unique educational model has created staggering differences in degree costs between our graduates and the U.S. average. The average U.S student will spend more than 6 years and $90,000 on their bachelor’s degree. The average WGU student will graduate within 2.5 years and spend less than $17,000 on their degree. The graph below outlines this difference. 

Average Cost of Bachelor Degree (U.S Dollars)

Wages

WGU’s emphasis on competency has created a graduating workforce with strong salary and employment outcomes. In 2019, over 90% of WGU students graduated with full-time employment, compared to 79% for the rest of the U.S. The average WGU graduate increases their pre-enrollment salary by $11,800 within two years of graduation and by $20,300, within 4 years. This is significantly higher than the national average of $8,200 after 4 years.

Average WGU and U.S Graduate Salary Increase (USD)*

Student debt.

Responsible borrowing at WGU focuses on helping students borrow only what they need. Since 2013, the average borrowing per year per student (of those who borrow) has decreased by more than 40%. Through our Responsible Borrowing Initiative, currently, 65% of WGU borrowers accept the recommendation to borrow less, and another 10% decline loans altogether. By simply providing useful information, WGU is able to significantly change student behavior and reduce borrowing. This has translated to student financial wellness in the form of:

  • Less overall debt - Undergraduate students at WGU graduate with 1/2 the debt of their peers across the country.

  • Reduced borrowing - Of the WGU students who borrow, this program has reduced the amount borrowed by 41% since 2013.

  • Lower default rates - WGU’s FY2016 cohort’s 3-year loan default rate is 4.2%, compared to the national average of 10.1%.

bowing-debt-comparison chart

Competency.

WGU graduates boast degrees that prepare them to succeed in their careers. The data below, from a 2019 survey of 300 employers of WGU graduates by Harris Poll, demonstrate this trend

97% of employers said WGU graduates meet or exceed expectations

Beyond expectations.
97% of employers said WGU graduates meet or exceed expectations.

96% said they would hire another WGU graduate

Top candidates.
96% said they would hire another WGU graduate.

 

97% said that their WGU graduates were well-prepared fro their jobs

Prepared for the job.
97% said that their WGU graduates were well-prepared for their jobs.

Government and community outcomes:

Student Debt Reduction Ratio

We believe that state dollars should follow the student, not the institution. One hundred percent of WGU’s government funding goes directly to student educational expenses. For every $1 a state spends on WGU, a student’s tuition obligation will decrease by $1.

Typical government education funding for higher education does not all go to the students. These funds also pay for overhead, expansion, and other operational expenses. For every $1 a state spends on the typical higher education institution, student tuition obligation decreases by only 25¢.

wgu vs usa cost comparison

Average Additional Government Income.

Excluding student loan payments, WGU students repay any financial aid they receive through their increased income tax burden. A 2019 survey of 1,247 WGU graduates found that the average WGU degree holder will earn $11,800 more than they did before enrollment within two years of graduation, and $20,300 more within four years of graduation. This is significantly higher than the national average of $8,200 for U.S graduates 4 years post-graduation. If we assume that WGU grads pay the average state-income marginal tax rate (12%) for households earning between $40,000-$80,000, then we can surmise WGU graduates pay between $1,416 - $2,436 in additional taxes in the first three years after their graduation and at least $2,436 more in taxes every year, four years after graduation.

$2,436/year

The average WGU degree costs only $16,675 once students enter the university (tuition x average WGU graduate years to completion: 2.5 years). Based on the salary rate of change, if state governments paid for the entirety of a WGU student’s tuition, they would make their money back in income taxes between 7.2 and 8.4 years and double their investment in 13. This calculation does not account for other higher education attainment benefits to the government and community, such as health expenditure savings, criminal justice savings, community activism, and state savings on government assistance programs.

Net present value.

Net present value represents the current value of a series of cash flows occurring at different times. It is not just the difference between total costs and total revenue, it also accounts for the time of transactions, assuming money now is better than money in the future. Using this formula, we can surmise that WGU degrees funded entirely by state governments are worth $56,728 to those state governments today because of the increased income taxes that students pay after graduating from WGU. In these calculations, we assume that the government discount rate is set at 3% (see Park’s “Optimal Discount Rates for Government Projects”) for the duration of payments and that student income increase after graduation will follow the same pattern established in our 2019 WGU Graduate Survey.

Average net present value of a WGU degree to state governments = $56,728

Data for “Government and Community Outcomes” from: WGU Policy and Public Affairs (2020), the Journal of Economics Education Review (2017), Sangkyun Park (2012), the Tax Foundation (2020), and a 2019 survey of 1,247 WGU graduates.