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.
What will it cost to major in dental hygiene at the nearest community college? What’s the average first-year and median earnings? What’s the graduation rate? Texas has created a useful cost-benefit guide for prospective college students, writes Fawn Johnson in the National Journal magazine.
The searchable MyFutureTx.com can be customized to reflect the searcher’s location, household income, and SAT scores. It will help a future college student browse possible careers, majors and college options, warn about college costs and debt and predict future earnings.
If you’re a high school student in Texas and dream of a career in the arts, you might want to know that fine-arts and studio-arts graduates at Midwestern State University in Wichita Falls make, on average, about $10,000 more per year than alumni who majored in the same subjects at Sul Ross State University in Alpine—and that the disparity lasts for 10 years after graduation. Yet the total cost of a bachelor’s degree is the same at both schools, around $42,000. The average time to complete the degree is also about the same, a little more than five years.
Several states have developed websites with data on graduates’ earnings, job opportunities across majors, and comparisons of colleges’ costs, writes Johnson. Texas’ site is the most sophisticated.
Anthropology majors who graduated in 2002 make an average of only $46,000 after 10 years on the job, the site warns. Economics majors from 2002, by contrast, earn about $100,000.
Investigating a career as a dental hygienist, I used the site to find eight community colleges that offer an associate degree in dental support services for an annual net price less than $5,000. Statewide, the average time to a dental support degree is 5.4 years, but 84 percent of graduates are employed. The average first-year pay is $44,747. By the 10th year, that’s up to $53,213 — better than graduates with a bachelor’s in anthropology.
But not all dental hygienists do that well. El Paso Community College graduates start at $24,435 and rise to $39,768 in 10 years.
Texas Reality Check encourages young people to estimate their spending, then shows pay, after taxes, for hundreds of careers. A child-care workers can expect to take home $1,233 a month, the site estimates. That’s one third the take-home pay of a dental hygienist.
Community colleges are a boon to the economy and to their students, according to Where Value Meets Values, a report by the American Association of Community Colleges (AACC).
In 2012 alone, the net total impact of community colleges on the U.S. economy was $809 billion in added income, equal to 5.4 percent of GDP. Over time, the U.S. economy will see even greater economic benefits, including $285.7 billion dollars in increased tax revenue as students earn higher wages and $19.2 billion in taxpayer savings as students require fewer safety net services, experience better health, and lower rates of crime.
Students also see a significant economic benefit. For every one dollar a student spends on his or her community college education, he or she sees an ROI of $3.80.
Associate-degree holders average $41,900 per year in mid-career, about $10,700 more than someone with just a high-school diploma, the report estimated.
Community colleges deliver a negative return on investment to taxpayers – though a positive return to students –because of the high dropout rate, an October report found. The earlier report focused more narrowly on tuition costs and post-graduation salaries, observes the Chronicle of Higher Education.
An author of that report, Mark S. Schneider, a vice president of the American Institutes for Research and president of College Measures, thinks the AACC report exaggerates the societal benefits. The AACC researchers “didn’t acknowledge that students who attend college are already less likely to pose risks or added costs to society,” he told the Chronicle. “It assumes that if you didn’t graduate from a community college, you’re going to be a fat, smoking criminal, which is just not true.”
Overweight and obese girls earn lower grades and are less likely to go to college, concludes a new study. That’s the primary reason educated adults are slimmer and healthier, the researchers concluded. It’s not that “higher education confers lifelong social, economic, and psychological benefits that help adults” make healtheir choices.
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.
The cost of not going to college is rising, according to a Pew Research Center analysis. “On virtually every measure of economic well-being and career attainment—from personal earnings to job satisfaction to the share employed full time—young college graduates are outperforming their peers with less education,” the report finds. The gap is widening between four-year college graduates and high school graduates.
Millennial college graduates ages 25 to 32 who are working full time earn about $45,500, while high school-only young adults average $28,000. The $17,500 gap is a record. College-educated Millennials also are more likely to be employed full time (89% vs. 82%) and significantly less likely to be unemployed (3.8% vs. 12.2%).
Median earnings for college graduates haven’t increased much in since 1986, but less-educated workers are doing much worse than in the past.
Young people today are far more likely to be living in poverty, Pew reports. Among those ages 25 to 32, 22% with only a high school diploma are living in poverty, compared with 6% of college-educated young adults.
In contrast, only 7% of Baby Boomers who had only a high school diploma were in poverty in 1979 when they were in their late 20s and early 30s.
Despite rising college costs, 72% of four-year graduates said college has paid off; 17% believe it will pay off in the future. Even among the two-thirds of college-educated Millennials with student loans, 86% say their degrees have been worth it or expect that they will be in the future.
Graduates had some regrets: Many said they wished they’d gained work experience and studied more in college.
Unfortunately, Pew combines Millennials with associate degrees, certificates or “some college” but no credential in one category. There’s a huge gap between people with a few community college courses, those who’ve earned a vocational certificate and those who’ve earned an associate degree in a vocational field. (Associate degrees in general education typically don’t raise earnings significantly unless the student transfers and completes a bachelor’s degree.)
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.
A college degree is “the ticket to the middle class,” according to President Obama, Education Secretary Arne Duncan and most parents and high school counselors, write Richard Vedder and Christopher Denhart in a Wall Street Journal commentary. But the college bubble will pop, they predict. As college costs rise, graduates’ earning advantage is declining.
Since 2006, the gap between what the median college graduate earned compared with the median high-school graduate has narrowed by $1,387 for men over 25 working full time, a 5% fall. Women in the same category have fared worse, losing 7% of their income advantage ($1,496).
A college degree’s declining value is even more pronounced for younger Americans. According to data collected by the College Board, for those in the 25-34 age range the differential between college graduate and high school graduate earnings fell 11% for men, to $18,303 from $20,623. The decline for women was an extraordinary 19.7%, to $14,868 from $18,525.
Meanwhile, the cost of college has increased 16.5% in 2012 dollars since 2006.
A 2013 Center for College Affordability and Productivity report, found many more college graduates are working as retail sales clerks, cab drivers and janitors. Underemployment has risen for recent college graduates since the recession, the Federal Reserve Bank of New York reports.
Employers want to hire graduates of top universities and graduates with master’s degrees, write Vedder and Denhart. But a bachelor’s degree no longer signals “best and brightest.”
Today, with over 30% with degrees, a significant portion of college graduates are similar to the average American—not demonstrably smarter or more disciplined. Declining academic standards and grade inflation add to employers’ perceptions that college degrees say little about job readiness.
As demand for a high-priced not-so-higher education falls, colleges will have to “constrain costs,” they write. In addition, “colleges must bow to new benchmarks assessing their worth.” There’s too much competition from online education to resist, even if it means “poorly endowed and undistinguished schools may bite the dust.”
Enrollment continues to rise at traditional four-year universities, notes Jordan Weissmann in The Atlantic. “All of the declines happened in the troubled for-profit sector, which has cut back somewhat on enrolling clearly under-qualified students in an effort to clean up its image, and community colleges, which have been grappling with overcrowding in recent years.”
30-Year-Old Has Earned $11 More Than He Would Have Without College Education headlines The Onion. It’s a parody that’s all too close to reality.
“After accounting for the cost of tuition, four years of lost earning potential, and the minimal increase in salary an undergraduate degree provides,” 30-year-old Patrick Moorhouse of Dublin, Ohio has raised his earnings by $11, reports The Onion. Moorhouse’s more prestigious first-choice college would have led to $54 more in earnings, said researcher Ken Overton.
“If Patrick had started working straight out of high school, he would have had slightly fewer job options than he does now, but living at home instead of a dorm or student apartment even just those first two years would have added at least $16,000 in total savings, which pretty much evens things out.”
However, it’s impossible to “put a price on the 12 Post-WWII European History lectures Moorhouse attended junior year,” the study noted.
Gainful employment regulations aim to ensure that career programs don’t leave students jobless and in debt, writes the New America Foundation’s Ben Miller in Improving Gainful Employment. The Obama administration’s new proposal is simpler and stronger than the one invalidated by a judge in 2012, he writes. But it still has loopholes.
In addition to measuring students’ debt-to-earnings ratio, Miller suggests three performance tests. Students would have to pay down their loans, no more than a third of students could withdraw in a year and the average graduate would have to earn at least as much as a full-time minimum-wage worker.
Career programs that can’t meet these standards — or have graduates with too much debt compared to their incomes — would risk losing eligibility for federal student aid.
Career programs need to focus on all their students — dropouts as well as graduates — Miller argues.
Furthermore, it’s not enough for programs to show low student debt if students also have low earnings, he writes: “Students are also spending billions in federal grant aid and arguably an even more precious resource, their time. They should expect better than living in or near poverty after completing a postsecondary program.”
Community college students typically don’t borrow — or don’t borrow very much — to pursue a vocational credential. But some don’t earn much either. Community colleges also have high dropout rates.
Gainful employment rules will hit high-cost for-profit colleges the hardest, but they also apply to nonprofit colleges that provide job training.