More than 50 million U.S. adults, or one in four, have earned a professional certification, license or educational certificate, according to a new Census report on alternative credentials. For workers with less than a bachelor’s degrees, certificates and licenses provide an “earnings premium.”
“Getting an academic degree is not the only way for people to develop skills that pay off in the labor market,” said Stephanie Ewert,co-author of the report.
Certifications and licenses are valuable in many fields, including business/finance management, nursing, education, cosmetology and culinary arts.
Around 30 percent of employed adults held an alternative credential, compared to 16 percent of the unemployed and 13 percent of those not in the labor force.
Seventy-one percent of workers in technical fields hold an alternative credential, the report found.
Certifications that “signal specific competencies” make it easier for jobseekers and employers to find each other, writes Mary Alice McCarthy on Ed Central. “Signals at the lower end of the job market . . . are relatively scarce.”
For people who don’t have the time, disposition, or financial means to complete a college degree, the positive economic return to alternative credentials is welcome news. For education and training providers worried about improving the labor market outcomes of their students, the report points to the value of embedding stackable and competency-based credentials into their programs.
And for the research and advocacy community, the results raise a host of new and important questions about how credentials function at different tiers of the labor market, how we ensure their quality, protect credential-seekers from worthless credentials, and use non-degree credentials to improve job quality.
The U.S. workforce would look a lot better in international comparisons if certificate holders without college degrees were counted as trained workers, McCarthy adds.
Success doesn’t always mean a degree or certificate for community college students. “Skill builders” who complete a few vocational courses can raise their earnings by as much as 15 percent, concludes The Missing Piece. The LearningWorks brief is based on a study by Peter Riley Bahr, a University of Michigan associate professor.
California community college students raised their pay by passing one to three courses in water and wastewater technology, criminal justice, electronics, information technology or manufacturing, the study found.
One in seven first-time California community college students enroll in six or fewer credits per semester. Most do well in their courses, but they don’t earn a credential or transfer. These students are considered failures. But some are skill builders who have other goals, such as earning an industry certification or state license, moving to full-time work and raising their pay.
As more states seek to link funding to student outcomes, colleges need ways to evaluate skill builders’ gains, Bahr concludes. Success can’t be measured solely by certificates and degrees.
Higher Education Pays: But a Lot More for Some Graduates Than for Others concludes a Lumina-funded report by Dr. Mark Schneider, the president of College Measures. “What you study matters more than where you study,” says Schneider, a vice president at the American Institutes for Research (AIR). Learning technical and occupational skills pays off, even for graduates of low-prestige colleges and universities. A music, photography or creative writing graduate from a prestige university will struggle.
Schneider analyzed first-year earnings of graduates of two-year and four-year colleges in Arkansas, Colorado, Tennessee, Texas and Virginia.
Some short-term credentials, including occupational associate’s degrees and certificates, are worth as much or more than bachelor’s degrees, the study found. For example, Texans with technical associate’s degrees averaged more than $11,000 more than four-year graduates in their first year in the workforce.
Certificates that require one or two years of study may raise earnings as much as an associate degree, especially a transfer-oriented degree.
In Texas, certificate holders earned almost $15,000 more on average than graduates with academic associate’s degrees, but about $15,000 less than graduates with technical associate’s degrees.
Not surprisingly engineering degrees have the biggest payoff, followed by nursing and other health-related fields. What is a surprise is the weak demand for biology and chemistry graduates. ”The S in STEM (Science, Technology, Engineering, and Mathematics) is oversold,” the report found.
Despite the clamoring for more students to focus on STEM, the labor market shows less demand for science skills. Employers are paying more, often far more, for graduates with degrees in technology, engineering and math. There is no evidence that Biology or Chemistry majors earn a premium wage, compared with engineers, computer/information science or math majors. The labor market returns for science are similar to those of the liberal arts, like English Language and Literature.
Women now make up a majority of biology graduates and about half of chemistry majors.
“Prospective students need sound information about where their educational choices are likely to lead” before they go into debt, the report concludes.
Vocational certificates are the fastest-growing segment of higher education, reports the Wall Street Journal. From 2001 to 2011, the number of certificates of one year or less awarded by community colleges more than doubled.
Job seekers can earn a certificate quickly and cheaply, but the workforce value varies.
“There’s no question in my mind that the market is rewarding students who have technical skills that can be used to solve problems,” said Mark Schneider, vice president of the American Institutes for Research and the president of College Measures, a company focused on U.S. higher education. “But too many of the one-year-or-less programs do not have good payoffs.”
“The certificate is a good choice for the low-middle of the high-school graduation class,” said Stephen Rose, a Georgetown University research professor who co-wrote a report on certificates last year. “But even if they can get really good at their job, they aren’t going to have other skills to move up.”
Short-term certificate holders earn 20 percent more than high school graduates — if they work in their field of training. Only 44 percent are working in their field, Rose found.
Some certificates pay very well. Men who earn certificates in computer and information services earn more than 72 percent of men with associate degrees and 54 percent of men with bachelor’s degrees. Women with computer certificates do even better.
Harper College in Illinois nearly doubled the number of certificates awarded from 2011 to 2012. More than 80 percent of short-term certificate earners in 2012 are employed; about half are working in their field.
Ken Pechtl, a recent high-school graduate, enrolled in a six-week summer course at Harper to become a certified nursing assistant before heading to the University of Pittsburgh in the fall. He sees the certificate program as a boost to his résumé and a way to earn extra cash at school next year.
Eric Chumbley, 24, of Lexington, Ky., paid $3,500 for a two-month certificate program that trained him to become a lineman for a utility company. Hired the day after graduation in 2009, he now makes about $54,000 annually.
Community colleges awarded more than 1 million associate degrees in 2011-12, an increase of 8 percent over the previous year, reports Community College Week, which lists the top 100 associate degree and certificate producers.
Completion campaigns are starting to pay off. Indiana’s Ivy Tech, a statewide system, ranks first among two-year institutions and third overall in associate degrees awarded with a 12 percent increase. Completion is “now a priority for all community colleges,” said President Thomas J. Snyder. But Ivy Tech is underfunded, he complained.
The situation only worsened when students poured into the system after the 2008 recession.
“The facilities themselves are woefully under built,” Snyder said. “Our student to adviser ratio is 1000-1. Most colleges try to get to 500-1.”
Snyder said while 47 percent of all students enrolled in public colleges in Indiana attend Ivy Tech, the state gets just 14 percent of the higher education appropriations.
The Lone Star College System in Texas ranked third among two-year institutions, and 10th overall, in the number of associate degrees conferred, with 4,208, a 27 percent increase from a year earlier. The number of degrees earned by Hispanic students increased by 55 percent from the year before.
“Our board has made student success its top priority,” said Chancellor Richard Carpenter. “For the past three or four years, not a meeting goes by where we don’t talk about completion.”
Lone Star leads the statewide Texas Completes program, which aims to “identify, address and eliminate obstacles to student success and implement procedures and policies to speed a student’s completion.” For example, all new students must attend a common orientation and declare a program of study in their first year.
Texans who earn a vocational certificate often earn more than associate-degree graduates in their first year in the workforce, concludes Higher Education Pays: The Initial Earnings of Graduates of Texas Public Colleges and Universities Who Are Working in Texas. Some workers with certificates earn more than $70,000 – $30,000 more than the median for graduates with bachelor’s degrees, concludes the Lumina-funded study by College Measures, a joint venture of the American Institutes for Research (AIR) and the Matrix Knowledge Group.
The median starting pay for criminal justice/police science certificate holders is $48,192, double the compared with $24,298 for those with an academic associate’s degree. Some health-care certificates allowed graduates to earn $70,000. Other high-paying certificates included: construction engineering technology/technician, electrician, pipefitting, engineering, industrial technology, and instrumentation technician.
However, not all certificates lead to high-paying jobs. Recipients of two dozen certificate programs earned less than $13,000 in their first year on the job. Cosmetologists and nursing/patient care assistants usually earned low wages.
Technical associate’s degrees pay well: The median starting salary is more than $50,000. By contrast, an academic associate degree lead to median earnings of $24,298,
First-year earnings for bachelor’s degree holders range from about $25,000 (biology) to about $47,000 (accounting): The average is $39,725.
Community college graduates’ first-year salaries vary from one college to another.
Academic associate’s degrees range from about $10,000 (Ranger College) to more than $30,000 for graduates from the Trinity Campus of Tarrant County Junior College and from Central Texas Community College.
For graduates with technical degrees, the range is even greater, from about $20,000 for graduates of Clarendon College to more than $65,000 for graduates from seven community colleges: College of the Mainland Community College District, San Jacinto College South Campus, Tarrant County Junior College South Campus, Galveston College, El Centro College, Trinity Valley Community College and Weatherford College.
A national study and analyses in Tennessee and Virginia have found similar results: Technical certificates and associate degrees often pay better than non-technical bachelor’s degrees at the start of graduates’ careers.
More students are trying to earn vocational certificates, but most don’t qualify for federal student aid, reports the New York Times. Federal aid “goes overwhelmingly” to students in degree programs, while many certificate students have to pay their own way.
Federal financial aid, like Pell grants, is not available to students who take noncredit courses, and many certificate programs, whether to be a certified nurse’s aide or to fix air-conditioners and heating systems, are not for credit.
Suri Duitch, dean of continuing education at the City University of New York, said federal programs often treated certificate students like second-class citizens. “These programs are less expensive than the degree programs at many four-year schools, but this student population generally has fewer resources,” said Ms. Duitch, whose university has more than 220,000 students in nondegree programs.
Federal job training funds are limited and workers who want to upgrade their skills may not qualify.
Vocational certificates are growing in popularity. In a few months to a few years, workers can improve their employability and earnings significantly, especially in technical fields. Men with certificates in computer/information services earned $72,498 a year on average, more than 54 percent of men with bachelor’s degrees, according to a Georgetown study; women earned more than 64 percent of women with bachelor’s degrees.
Yet, Northern Virginia Community College dropped plans to offer information technology certificates because too few students could afford the course. NOVA also had to delay its program for certified nurses’ aides to give students time to come up with the money. Ana Bausher, who earns $250 a week as a part-time clerk for United Parcel Service, “had to save up six, seven months” to afford the $1,600 fee for the four-week course.
Anthony P. Carnevale, the director of Georgetown University’s Center on Education and the Workforce and the chief author of its study on certificates, questioned whether it was the best use of federal money to give Pell grants to students at four-year colleges who pursue majors in fields like philosophy, with little economic payoff in employment and earnings. Why not, he asked, provide aid to students who take noncredit certificate courses that often translate quickly into jobs and higher pay?
“If you want to take four years of Shakespeare, that’s up to you,” he said. “Is that what the public sector should support? The bottom line is, given the budget situation, we ought to be more concerned about preparing people for the job market.”
Despite high unemployment, employers complain they can’t find skilled workers. Few are looking for philosophers.
Old ideas about higher education are keeping completion rates low at community colleges argues Removing the BA Blinders: Reconceiving Community College Procedures to Improve Student Success, part of The Changing Ecology of Higher Education from Stanford’s Center for Education Policy Analysis.
Outdated norms — “all students should pursue a BA degree, take four years of full-time courses, expect no interim credentials or payoffs, explore only academic fields (labeled “general education”), and require minimal formal guidance” — pose “serious barriers to nontraditional students, write James Rosenbaum, Janet Rosenbaum and Jennifer Stephan.
In our interviews, community college students report a wide variety of mistakes in college. They take many courses without credits, they receive many credits that do not count toward credentials, they face predictable delays without receiving warning about them, and they receive credentials that have no job payoffs.
Many reformers have BA blinders. They devote great energy to transforming low-achieving students into traditional students by imposing massive amounts of remedial coursework. This BA-centric approach has failed consistently—sometimes with failure rates as high as 83% in national studies, for students placed in the lowest level of remedial coursework.
The researchers compared six community colleges with two for-profit career colleges. The career colleges had a much higher success rate: 57 percent vs 37 percent. For blacks, the difference was striking: While only 19 perent of blacks in community college completed a credential, 64 percent completed at private career colleges.
“Students at private occupational colleges are nearly identical to public community college students in terms of prior test scores, grades, and socioeconomic status,” according to federal data, the researchers point out.
Private career colleges help students earn vocational certificates quickly en route to an associate degree. If they quit after the first certificate, they’ve improved their employment prospects. It’s often a bachelor’s or nothing — usually nothing — for community college students.
In traditional community colleges, students go through a “fail-first” process in which 42% drop out in the first year, 50% of them return, and 53% of them drop out again. In interviews, counselors report that they do not mention their occupational programs to young students (ages 18 to 24). Students are only told about these options if they are returning dropouts or older than age 24.
Since it’s assumed all students should go for a bachelor’s degree, community colleges place students in remedial courses to acquire college-level academic skills and urge first-year students to take a smattering of general education courses. Many students could skip remediation if they were urged to take vocational courses, the report finds. “In our interviews with 48 occupational faculty, most reported that computer networking technicians, medical technicians, and accounting staff only need eighth- to tenth-grade math skills.”
Career colleges structure programs, telling students exactly what to take, require advising, monitor students’ progress carefully and provide job placement services, researchers found. In community colleges, students are on their own — unless they have college-savvy parents who can guide them.
The report recommends seven ways to improve completion:
1. Offer opportunities for quick successes
2. Offer opportunities for quick payoffs
3. Avoid or delay obstacles that prevent success
4. Develop degree ladders
5. Provide structured program pathways with courses in predictable time slots
6. Provide “guardrails” that help guide student progress
7. Emphasize job placement
Many students want a bachelor’s degree because they’ve been told it’s the only path to success. The portion of incoming freshmen that cited ”to be able to get a better job” as a very important reason for attending college reached an all-time high of 87.9 percent in 2012, reports UCLA’s annual survey of new students at four-year colleges and universities. There are many realistic options for career-minded students with little chance of completing a bachelor’s degree but a fighting shot at a pharmacy tech certificate or an associate degree in computer networking.
Lumina Foundation’s new strategic plan for 2013-2016 describes new ideas for ways to reach the foundation’s goal: 60 percent of Americans with high-quality degrees, certificates, and other credentials by 2025. The plan calls for:
Creating new models of student financial support that make college more affordable, make costs more predictable and transparent, provide incentives to increase completion, and align federal, state and institutional policies and programs.
Creating new higher education business and finance models that significantly expand the nation’s capacity to deliver affordable, high-quality education—supported by public finance and regulatory policies that create incentives for, and remove barriers to, innovation.
Creating new systems of quality credentials and credits defined by learning and competencies rather than time, clear and transparent pathways to students, high-quality learning, and alignment with workforce needs and trends.
Lumina plans to spend $300 million over the next four years.
“There hasn’t been enough progress on the attainment agenda,” Jamie Merisotis, Lumina’s president, told Inside Higher Ed.
Lumina will also continue to push completion-related efforts at both the state and federal levels. And the foundation’s leadebbrs said federal policy would be crucial in shaping a modern higher education system necessary to encourage the 23 million additional degrees and meaningful credentials needed to hit 60 percent attainment.
They pointed to a desperate need for strong leadership at the federal level on questions about the structure of student aid, quality assurance and accreditation, and the alignment of workforce development and higher education.
Lumina wants to make it easier for students who’ve learned on the job, online or on their own to earn credits for competency. Officials also are keeping an eye on “emerging forms of credentialing, like certificates issued by massive open online course (MOOC) providers,” notes Inside Higher Ed. Lumina will add certificates to its Degree Qualifications Profile, which “attempts to establish what constitutes a valuable college degree.”
Community colleges “took the greatest hit” in 2010 as higher education struggled to recover from recession, concludes the Delta Cost Project in College Spending in a Turbulent Decade.
All colleges and universities are trying to serve more students with less money, the report found. “As funding failed to keep pace with historic increases in enrollment, educational spending per student plummeted to its lowest level in a decade.”
Community colleges suffered the greatest financial hardships.
Historic enrollment increases, combined with sharp losses in per-student revenues from state appropriations and meager increases in net tuition revenue, resulted in significant cuts to academic spending per full-time equivalent (FTE) student. Community colleges concluded the decade spending less per student than they had ten years earlier.
State universities were able to preserve spending on instruction and student services, while private four-year institutions implemented widespread cuts, the report found. Although students covered a larger portion of educational costs, sharp tuition increases were not enough to offset lost revenues.
Funding for community colleges continued to fall further behind other public institutions. . . They were the only public institutions at which average total operating revenues per FTE student declined in 2010 and also were lower than a decade earlier. Community colleges suffered the deepest cuts in state and local appropriations per student in 2010, with funding reduced by approximately $1,000 per student; however, they also limited the new money coming from net tuition revenue more than did other types of public institutions.
Efforts to keep community colleges accessible and affordable while accommodating more than 40 percent of new higher education students—often the most economically or academically disadvantaged—have significantly eroded the resources they have to devote to each student.
The growth in less costly, shorter-term certificate programs cut the cost of completion in community colleges from 2000 to 2010.