Tennessee: Certificate holders out-earn 4-year grads

Tennessee workers with associate degrees and long- term certificates often start at higher wages than four-year graduates, according to a new College Measures study. It takes five years for graduates with bachelor’s degrees to catch up.

“You don’t need to go to a flagship university to get a good job. There are many successful paths into the labor market,” said Mark Schneider, author of the report. “Students have the right to know before they go and know before they owe.”

The EduTrendsTN website, a joint venture of the American Institutes for Research (AIR) and the Matrix Knowledge Group, has detailed data on labor market returns in Tennessee.

At the end of the first year in the workforce, long-term certificate holders earned more than $40,000, those with associate degrees, $37,000 and those with a bachelor’s, $34,262. After five years, the median wages of bachelor’s graduates were similar to two-year graduates’ earnings  ($41,888 versus $41,699), and slightly trailed certificate holders ($42,250).

“Many sub-baccalaureate credentials can be entryways to the middle class,” Schneider said.

Learning how to fix things or fix people pays off, writes Schneider on The Quick and the Ed. For associate degree graduates, electric engineering technicians earned the most ($61,000) after five years. Graduates in nursing and allied health fields also did well.

Graduates in business, liberal arts and management and information systems earned less than the state median. Human Development and Family Studies graduates earned much less.

After five years, associate degree graduates average $41,699, a few dollars more than Tennessee’s median household income.

“Five years after graduation, the 15 Tennesseans who got bachelor’s degrees in ethnic, cultural minority, or gender studies were making an average annual wage of $26,000, actually about $2,000 per year less than they were making one year after graduation,” notes Fawn Johnson on National Journal. 

In a recent survey, 99 percent of parents with children in college said that college is “an important investment in one’s future.” Yet, “only about half of students, graduates, and parents of college students had engaged in an ‘in-depth’ conversation about how student loans would be managed or paid for after graduation.”

College is the new high school

A college degree is becoming the new high school diploma, the minimum credential required to get even the most basic, entry-level job, writes Catherine Rampell in the New York Times. It takes a BA to get a job as a file clerk.

“Upcredentialing,” also known as “degree inflation,” is affecting a wide range of jobs in administration, sales and other fields, reports Burning Glass, a labor market analytics company. For example,  just 25 percent of  insurance clerks have a four-year degree, but “twice that percentage of insurance-clerk job ads require one,” reports Rampell. ” Among executive secretaries and executive assistants, 19 percent of job-holders have degrees, but 65 percent of job postings mandate them.”

Employers prefer college graduates even for jobs that don’t require advanced skills, reports Burning Glass. A third of 25- to 29-year-olds have a four-year degree, notes Rampell. “Bachelor’s degrees are probably seen less as a gold star for those who have them than as a red flag for those who don’t. If you couldn’t be bothered to get a degree in this day and age, you must be lazy, unreliable or dumb.”

Employers are clearly skeptical that an associate degree really meets their needs,” says Burning Glass CEO Matt Sigelman.

However, “jobs resist credential inflation when there are good alternatives for identifying skill proficiency,” the company reports. Health care jobs, such as nursing and respiratory therapy, and engineering technician jobs  “are governed by strict licensing or certification standards, well-developed training programs, or by measurable skill standards such that employers do not need to look at a college degree as a proxy for capability.”

A push for ‘reverse transfer’

Reverse transfer — using credits earned at a four-year institution to award an associate degree — is increasingly popular. Many community college students transfer before earning an associate degree, but fail to complete a bachelor’s.

U.S. Sen. Kay Haganm D- North Carolina, and  Sen. Tom Harkin, D-Iowa, have sponsored a bill giving federal incentives for reverse transfer programs, reports the Charlotte Observer. If approved, it would become part of the Higher Education Act.

Indiana’s performance funding is complicating reverse transfer, reports the Indianapolis Star. Ivy Tech wants to award associate degrees to former students who earn enough credits. Indiana University fears the community college will get to claim full credit for the graduate even though the university has done most of the educating.

Why get an associate degree en route to a bachelor’s?

Community colleges should encourage students to earn an associate degree before transferring, writes Davis Jenkins on Completion By Design’s blog.

More than 80 percent of new community college students intend to complete at least a bachelor’s degree, he writes. However, only a quarter eventually transfer to a four-year college or university and, of those, a third of transfers complete an associate degree first.

A Community College Research Center (CCRC) study compared community college students with similar characteristics who had earned 50 to 90 credits before transferring. Students who’d earned a transfer associate degree were 77 percent more likely to complete a bachelor’s degree within four years, and 52 percent more likely to earn one within six years.

. . . students who transfer in with an associate degree are more likely to have taken a structured set of courses leading to a degree in a program of study, and thus may have had an easier time transferring their credits. The students who transfer with 50-90 community college credits but no degree are more likely to have taken a “hodgepodge” of courses that are difficult to transfer, leading to delays in bachelor’s completion.

The loss of community college credits upon transfer is endemic across the country and, as a recent national study found, is the biggest barrier to bachelor’s completion for community college transfer students.

Community colleges should guide students “systematically and explicitly” into programs of study that lead to an associate degree, Jenkins writes. “Currently, community college students are faced with a bewildering array of courses and programs, and as a result they often make suboptimal choices.”

Completion by Design colleges are creating transfer pathways that will let students transfer with “junior standing in a major (rather than with credits that transfer as electives).”

Associate degree is key step to bachelor’s

Community college students who earn a transfer-oriented associate degree are much more likely to complete a bachelor’s degree than similar students who transferred with 50 to 90 credits but no degree, concludes a Community College Research Center study.

However, transfer students who’d earned an applied science associate degree, which is designed for direct entry into the workforce, were less likely to complete a four-year degree than no-degree transfers.

Nationally, nearly two thirds of community college students who transfer to four-year colleges do so without first earning an associate degree. And while over 80 percent of all entering community colleges indicate their intention to earn a bachelor’s degree, only 15 percent end up doing so within six years.

Associate-degree transfers are guaranteed full “credit capture” in the state that was studied. Transfers with no degree may have been denied credit for some of their community college courses. That costs students time and money and lowers the odds of completion.

Forty-two percent of transfer students lost at least 10 percent—and sometimes much more—of their community college credits, a recent CUNY study found. Students who were able to transfer 90 percent or more of their credits were two and half times as likely to complete a bachelor’s degree as students who transferred less than half their credits.

“Encouraging students to earn an associate degree before they transfer, coupled with state policies that guarantee credit transfer for associate degree holders, could significantly increase national rates of bachelor degree completion,” CCRC researchers concluded.

It pays to earn a 2-year degree

Earning an associate or bachelor’s degree paid off for students who enrolled in North Carolina community colleges in 2002-03, concludes a working paper from the Center for Analysis of Postsecondary Education and Employment (CAPSEE).  The economic returns for health-care credentials such as nursing were “extremely high.”

However, certificates did not produce strong economic benefits.

The recession did not erode the “substantial and consistent” gains from earning a two-year degree, the report found. “Even accumulating some college credits (but no degree) led to higher earnings for students.”

Students who earned degrees in nursing, allied health fields, construction, mechanics and welding improved their earning significantly, reports Community College Daily. However, there were no economic returns for women who earned education or child care degrees; men in those fields actually did worse.

The CAPSEE review tracked incomes five years after initial enrollment for students enrolling between 2001 and 2008 and completing an associate degree. It found that the advantage conferred by a degree remained consistent — about $4,800 per year for women and $3,000 per year for men — despite the recession starting in late 2007.

Graduates were less likely to be unemployed, according to CAPSEE.

University wants to give 2-year degrees

Kent State University wants to start awarding two-year degrees to students on their way to four-year degrees, reports the Columbus Dispatch.  Students who earn 60 credit hours could qualify for the associate degree, which would “provide a fallback” for those who never complete a bachelor’s degree — and increase state funding.

 Of the money that Ohio sets aside for four-year public schools, a greater share this year is tied to the number of degrees that schools grant. That includes associate degrees, even though they traditionally have been a specialty of community colleges and the regional campuses of four-year universities.

That could be a boon for Kent State but take a toll on other schools –– the state sets aside only a certain amount of money for colleges, so more for Kent State means less for others. 

Community college presidents are wary of competition. “It’s gaming the system,” said Karen E. Rafinski, interim president of the Ohio Association of Community Colleges. 

All four-year colleges should award associate degrees to students who finish two years of higher education, argues Stephen Joel Trachtenberg, president emeritus of George Washington University, in an Inside Higher Ed commentary.

He imagines two brothers. One goes to community college, earns an associate degree and finds a job. The other goes to a university but drops out in his third year. Without a credential, he can’t find an entry-level job. 

Three years of college study but no earned degree is worth less in the market place than two years of college that culminates in an associate degree. If that is so, then why not award the A.A. to students who successfully complete two years of study but don’t make it to the finish line at traditional four-year institutions?

An associate degree in no particular field of study isn’t worth much in the workforce. The dropout brother would do better to reverse transfer to a community college and pick a field of study that lets him use some of his old credits. 

Ambition matters

Ambition matters,writes Bryan Caplan on EconLog. It explains why students who apply to selective colleges earn more than those who set modest goals.

In Ambition Revisited, he looks at James Rosenbaum’s College-For-All: Do Students Understand What College Demands? It shows degree completion as a function of high school students’ grades and goals.

Exhibit A: Percentage of high school seniors who plan to get a BA who successfully do so.

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Exhibit B: Percentage of high school seniors who plan to get an AA who successfully do so.

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More than two-thirds of A-students who plan to get a BA succeed, compared to less than half of A-students who plan to get an AA, Caplan observes. “This pattern extends all the way down to the weakest students.” In fact, B students who aim for a bachelor’s are as likely to succeed as A students who aim for an associate degree.

It’s likely seniors who want a BA are more ambitious than classmates willing to settle for an AA, Caplan writes. “As a result, they are — holding grades fixed — markedly more likely to achieve their goal despite its intrinsic difficulty. Seniors who say they only want an AA, in contrast, simultaneously aim low and fall short.”

Ninth graders should be shown Exhibit A: Less than half of B students and one fifth of C students earn a bachelor’s degree. Ambition isn’t enough: You need to do the work in high school.

College premium varies

The college premium is growing, but higher education’s benefits vary significantly depending on “individuals, types of credentials, occupations, and geographical locations,” concludes an Urban Institute study by Sandy Baum.

Median earnings for full-time workers aged 25 to 34 with an associate degree were 19 percent higher than for high school grads in 2012. The college premium rose to 26 percent for workers 35 to 44 years old and 28 percent for those 45 to 54.

Full-time workers 25 to 34 years old with “some college but no degree” earn 7 percent more than those with a high school diploma only. That rises to 19 percent for workers 35 to 44 years old.

The “some college” group includes a mix of college dropouts and people who earned vocational certificates. Dropouts aren’t likely to see an earnings premium, while some vocational certificates raise pay significantly.

Including full- and part-time students, 56 percent of college enrollees complete a degree or certificate in six years, one study estimates. After 10 years, 62 percent have completed a credential. 

Six is the new four

Brooklyn’s P-Tech is the The School That Is Changing American Education, writes Rana Foroohar in Time. Students can graduate in six years with a high school diploma, an associate degree and a job offer from IBM, which worked with the City University of New York to create the program. “Six should be the new four,” says IBM executive Stanley Litow.

In Chicago, IBM partnered with Richard J. Daley College to open Sarah E. Goode STEM Academy, a six-year program that leads to a $40,0000- a-year IBM job. It’s a ticket to the middle class, writes Forhoohar.

A four-year high school degree these days only guarantees a $15 an hour future, if that. According to projections by the Center on Education and the Workforce at Georgetown University, the U.S. economy will create some 47-million job openings in the decade ending 2018, but nearly two-thirds will require some post secondary education. The Center projects that only 36% of American jobs will be filled by people with only a 4-year high school degree – half of what that number was in the 1970s.

Workers with a vocational associate degree will earn 73% more than those with only a high school diploma, the center projects.