Tech credentials pay for low-income students

Vocational certificates and associate degrees in health, transportation, construction, manufacturing and security lead to relatively high pay for disadvantaged students and low-scoring high-schoolers in Florida, concludes a new Calder working paper.

Low achievement in high school accounts for much of disadvantaged students’ problems in postsecondary programs and in the workforce, the study found.

Earnings for disadvantaged kids are hampered by low completion rates in postsecondary programs, poor college performance, and their selection of low-earning fields. . . . Many disadvantaged (and other) students choose general humanities programs at the AA (and even the Bachelor’s or BA) level with low completion rates and low compensation afterwards.

Even those with weak academic records can do well if they pursue a technical certificate or degree program, researchers found. Those with vocational certificates earn 30 percent more than high school-only workers and those with associate degrees in technical fields earn 35 to 40 percent more.

Promoting high-potential career pathways and offering high-quality apprenticeships could help disadvantaged students move up.

Why graduation rates are misleading

Federal college graduation rates don’t distinguish between certificates and associate degrees, presenting a misleading picture of community colleges and for-profit institutions, writes Ben Miller on EdCentral.
10 08 14 CC vs For Profit 2 The College Graduation Rate Flaw That No Ones Talking AboutAccording to the Integrated Postsecondary Education Data System (IPEDS), three-year graduation rates are much higher at for-profit colleges than at community colleges: 63 percent compared to 21 percent.

However, 86 percent of for-profit graduates have finished less-than-two-year programs, “almost certainly certificates,” while three-quarters of community college graduates were in programs that were two years or longer, likely associate degrees. It’s a lot easier to finish a short program than a longer program.

In 2012-13, 58 percent of credentials awarded by community colleges were associate degrees; at for-profit colleges, 27 of graduates earned associate degrees.
10 08 14 CC vs For Profit 4 The College Graduation Rate Flaw That No Ones Talking About“About 47 percent of students at for-profit colleges who started out seeking an associate degree or certificate earned something,” writes Miller. “That’s higher than the attainment rate at public colleges (37 percent).” However, more public college students were still pursuing a credential.

The analysis includes public four-year institutions that award associate degrees. Not surprisingly, public students are far more likely to earn a bachelor’s degree than for-profit students.

I’d like to see a comparison of completion rates at public technical colleges, which do not offer associate degrees for transfer. For students pursuing vocational credentials, are community colleges as effective as for-profit career colleges?

Short-term certificates raise earnings

Earning a vocational certificate in one year or less can raise earnings significantly, concludes a forthcoming study announced at a Center for Analysis of Postsecondary Education and Employment conference. Past research has found labor market payoffs only for longer-term certificates.

Di Xu and Madeline Trimble, researchers at the Community College Research Center, found “positive, significant returns” for short-term certificates earned at community colleges in Virginia and North Carolina, reports Inside Higher Ed.

North Carolina students earned $1,172 more per year, on average, and were 7 percent more likely to be employed. Virginians who earned a certificate earned $888 more and were 3 percent more likely to be working.

 

The value of certificates varies, depending on the field, said Trimble. Earning a basic law enforcement certificate at a North Carolina community college leads to a $10,000-plus raise because the certificate is “tightly tied to licensing requirements” in the state, she said.

Short-term certificates in nursing or medical assisting failed to yield almost any labor-market returns, the research found, while longer-term certificates in those fields did well. And short-term certificates in some health-care disciplines, such as in phlebotomy in North Carolina or dental assisting in Virginia, did result in substantial wage gains.

At Northern Virginia Community College (NOVA), certificates are stackable, said Bob Templin, NOVA’s president.  Credits will count toward higher-level certificates and degrees.

Students who earn a 12-week certificate in an automotive technology field, such as one for an emissions specialist, are employed and earning $39,000 a year 18 months later, said Templin. But there’s little pay bump for people who earn emergency medical certificates because most students use them to become volunteer first responders for fire departments.

Associate degrees in liberal arts, humanities or general education don’t raise earnings, concludes a study by the Center for Analysis of Postsecondary Education and Employment. These degrees pay off only if they’re the first step to a bachelor’s degree.

Completion, default rates can be misleading

Commonly used college quality measures, such as graduation rates and loan defaults, are inadequate and sometimes misleading, writes Ben Miller, a senior policy analyst for the New America Foundation, on EdCentral.

Completion statistics for community colleges and other two-year-or-less institutions are especially inaccurate, he writes. It’s not just that the federal data misses part-timers and transfers. Completion data also confuses success rates in short-term certificate programs with longer-term associate degrees.

. . . many certificate programs run for no more than a year. These programs thus present fewer opportunities for students to drop out. That’s why colleges that predominantly grant certificates tend to have quite high completion rates and also the reason that for-profit institutions often appear to have better graduation rates than the largely associate-degree-granting community colleges.

A low completion rate is a sign of low quality, but a high completion rate may signify a quick, easy program with very little return on students’ time and money.

Cohort default rates also can be misleading, especially for community colleges with very few borrowers, writes Miller.

For example, Gadsden State Community College in Alabama has a 20 percent default rate but that’s based on five borrowers out of an enrollment of over 8,967. This makes it impossible to draw any conclusions about a college based upon less than 0.05 percent of the college.

On the other side, a low cohort default rate might be just as much an indication of successful loan management than success. The cohort default rate only measures whether students default within a certain time window. Students who default after that period or who are extremely delinquent but never default are not counted in the rate. The usage of income-based payment plans can also distort cohort default rates, since a borrower could be earning such a low income from their program that they have to make little to no payments, making it more difficult to default.

Passage rates on licensure or certification exams, such as in nursing, do measure learning outcomes. However some programs — especially in teaching — ensure a 100 percent pass rate by denying diplomas to students who haven’t passed the exam.

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.

‘Skill builders’ don’t want degrees

 Not every college student wants a degree. “Skill builders” use community colleges to pick up expertise, writes Eddie Small on the Hechinger Report. Once they have what they need, they depart. If they’re counted as degree-seeking students — the only way to qualify for financial aid — that drives up the college’s dropout rate.

Kevin Floerke, 26, earned an archaeology degree from UCLA in 2010. Now he’s taking a course in fieldwork techniques at Santa Rosa Junior College in Northern California. He hopes to use the skills in his job leading tours for the National Geographic Society.  

Nearly a third of California community college students take one to four courses in a career or technical field, succeed and depart without a credential, according to a study called The Missing Piece.

Skill builders in California are concentrated in construction, real estate, computers, law enforcement, and early childhood education, according to Kathy Booth, co-author of the study. For most of them, the college credits led to wage increases. Students who took courses in information technology, for instance, saw their pay increase by 5 percent, and skill builders at California community colleges overall saw their median salaries go up from $49,800 in 2008-09 to $54,600 in 2011-12, the system reports.

Increasingly, colleges are evaluated — and sometimes funded — based on completion. A student who takes two IT courses, gets a raise and doesn’t re-enroll may be considered a dropout. “That’s a success story for that student and for the overall economy and society, but it’s hard to count,” said Paul Feist, spokesman for the California Community Colleges System.

Some colleges are creating “very short-term certificates” for skill builders, said Patrick Perry, vice chancellor of technology at the California system chancellor’s office.

Certification raises earnings

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.”
Alternative Education Credentials
“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.

‘Skill builders’ succeed without a degree

skill buildersSuccess 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 ed pays — for technical grads

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.

Short-term certificates grow in popularity

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.