THE ACCT 2016 INVITATIONAL SYMPOSIUM: GETTING IN THE FAST LANE Ensuring Economic Security and Meeting the Workforce Needs of the Nation Discussion Papers 2016 Invitational Symposium R E T U R N O N INVESTMENT WHAT IS THE VALUE OF THE ASSOCIATE DEGREE? BY MARK SCHNEIDER THE ACCT 2016 INVITATIONAL SYMPOSIUM: GETTING IN THE FAST LANE Ensuring Economic Security and Meeting the Workforce Needs of the Nation The ACCT discussion paper series, Getting in the Fast Lane: Ensuring Economic Security and Meeting the Workforce Needs of the Nation, is supported by Strada Education Network, formerly known as USA Funds. ACCT represents the community college trustees who govern our nation’s community, technical, and junior colleges. ACCT aims to foster the principles and practices of exemplary governance while RETURN ON promoting high quality and affordable higher education, cutting- edge workforce training, student success, and the opportunity for all individuals to achieve economic self-sufficiency and security. INVESTMENT Strada Education Network is a nonprofit corporation that supports Completion With a Purpose, building a more purposeful path for America’s students to and through college and on to rewarding What is the Value of the careers and successful lives. Strada Education Network pursues its nonprofit mission through philanthropic activities and partnerships, Associate Degree? policy research, and programs and services that enhance preparation for, access to and success in higher education. The conclusions in this report do not necessarily represent the official positions of ACCT or Strada Education Network. Copyright © 2017 by the Association of Community College Trustees All rights reserved. No part of this report may be reproduced without permission of the publisher. INTRODUCTION In partnership with Strada Education Network, formerly known as USA Funds, the Association of Community College Trustees (ACCT) hosted its seventh Invitational Symposium on Student Success in October 2016. The Symposium brought together community college leaders, trustees and experts in workforce development to learn strategies about how to improve the return on students’ investments in higher education. Papers prepared by five researchers were delivered during the symposium. Authors explored the value of obtaining an associate degree and presented data on both the opportunities and the challenges students face in obtaining a sub-baccalaureate degree or credential. These papers are meant to help inform boardroom discussions and to give policymakers and community college leaders tools and data to support these important discussions. Each paper also provides a study guide with questions to help spur these critical conversations. Community colleges provide an affordable pathway for many to the middle class, equipping students with degrees or other credentials that can lead to gainful employment and helping to match prospective workers with unfilled job openings. The purpose of these papers is to provide perspectives on how well community colleges meet the needs of their students and if they are, in fact, providing students with a viable path to economic advancement. In this paper, researcher Mark Schneider, vice president and institute fellow, American Institutes for Research (DC), compares sub- baccalaureate credentials with baccalaureate and post-baccalaureate degrees. In 2014, there were 100,000 more sub-baccalaureate degrees or credentials awarded than bachelor’s degrees. He shows that majors matter, and specific degrees offer the potential of high earnings, particularly in fields where graduates will “fix things or people.” He advises that one of the best ways to ensure that community colleges can help students achieve labor market success is to develop strong pipelines from the college to the workplace. The paper provides a checklist of high-impact practices that colleges can employ to support students on their journey to degree completion and ultimately improved employment outcomes. To view the researchers’ presentations and to download a PDF version of these papers please visit the ACCT Trustee Education website at: www.trustee-education.org/ We wish to thank the authors, Strada Education Network and ACCT staff who helped support the completion of these reports. Narcisa A. Polonio, Ed.D. Executive Vice President for Research, Education and Board Services Colleen Allen Director, Educational Services ACCT Discussion Papers 1 RETURN ON INVESTMENT: What is the Value of the Associate Degree? MARK SCHNEIDER For most of the last 50 years, postsecondary Facts on the ground are already providing a education has been dominated by the foundation for that message. As evident in traditional image of ivory towers, where courses Table 1 (drawn from IPEDS), the most common and curricula were created mostly by faculty postsecondary credential awarded in the United and where it was widely assumed that the States is the bachelor’s degree—as it has been degrees being awarded would lead to solid for decades. More specifically, according to wages and a middle-class life.1 The product of IPEDS, over 1.5 million bachelor’s degrees were that idyllic world was a bachelor’s degree that awarded in 2008 and almost 1.9 million in 2014 took four years to get at a reasonable cost. (an increase of 21 percent). Community colleges and career and technical The data also show the associate degree is the education were, at best, afterthoughts. second most commonly granted degree—with But that world is being challenged by rapidly a rate of increase between 2008 and 2014 rising tuition, rising student debt (and high almost twice that of the bachelor’s, narrowing default rates), and the underemployment of the numbers gap between the two degrees. But graduates.2 As a result, there is growing interest the data show something perhaps even more in faster and cheaper postsecondary pathways important: There has been growth in the number that can lead to high wages. Herein lies the of sub-baccalaureate certificates granted, the challenge and the opportunity for community bulk of them awarded by community colleges. colleges: Can they demonstrate to students, Adding certificates and associate degrees families and taxpayers that they offer pathways together, in 2014, there were over 100,000 more into the middle class that are more efficient than sub-baccalaureate credentials awarded than the bachelor’s degree? bachelor’s degrees. The answer is yes. TABLE 1: CHANGES IN THE NUMBER OF POSTSECONDARY CREDENTIALS AWARDED Year 2008 Year 2014 Growth Associate degrees 722,122 1,003,267 39% Bachelor’s degrees 1,542,440 1,866,178 21% Certificates of less than 1 year 370,176 479,242 29% Certificates of 1 but less than 2 years 286,476 451,650 58% Certificates of 2 but less than 4-years 28,644 37,138 30% Total Sub- baccalaureate 1,407,418 1,971,297 40% 2 ACCT Discussion Papers There are many factors that have likely Figure 1 (page 4) shows the wages of a contributed to the rapid growth of sub- cohort of students with different levels of baccalaureate credentials. postsecondary credentials one and 10 years • Demographics: The nation’s population is after completing. These data illustrate several changing at a rate not seen in a century, and trends. Here, I focus only on baccalaureate community colleges enroll a large share of and sub-baccalaureate credentials: non-traditional students.3 1. Immediately after graduation, on average, • State policy: Some of the growth is a result students with associate degrees who enter of state policies that encourage or even the labor market earn about as much as require students to begin their postsecondary bachelor’s graduates. education in community college before transferring to a bachelor’s institution. 2. However, the earnings curve for bachelor’s These so-called 2+2 programs are becoming graduates is steeper than for students who increasingly common and are core to many hold sub-baccalaureate credentials—so state higher education policies. This is crystal that 10 years after graduation, on average, clear in Florida’s 2+2 Pathways to Success.4 bachelor’s degree students earn more. • Costs: Community colleges are, overall, much 3. But even if at the 10-year mark holders of more affordable than four-year colleges, and sub-baccalaureate credentials have, on because general education courses are often average, fallen behind bachelor’s graduates, “commodities,” in other words transferable, their earnings usually put them squarely in students reduce their cost of a bachelor’s the middle of their state’s income distribution. degree by beginning at a community college. 4. Finally, averages hide considerable variation— But some of the growth in enrollments can also and once we unpack these averages to look be traced to the fact that community colleges are at the wages of students who complete the nation’s primary way of delivering career and different programs of study, a far more technical education (CTE), and there is growing instructive perspective on student success evidence that CTE degrees and certificates can opens up. provide training that allows students to out- earn their peers who have pursued bachelor’s This new perspective shows why majors (and often even master’s) degrees. matter—and shows how students with career I will illustrate this using data from the State of and technical training from community colleges Texas, but the patterns are the same in every can earn wages higher than many of their state in which College Measures5 has worked. peers who pursued bachelor’s degrees. “ Adding certificates and associate degrees together, in 2014, there were over 100,000 more sub- baccalaureate credentials awarded than bachelor’s degrees.” ACCT Discussion Papers 3 FIGURE 1: T EXAS: MEDIAN WAGES AMONG COMPLETERS IN 2005 AND 2014 (1 AND 10 YEARS AFTER COMPLETION), BY CREDENTIAL Source: Mark Schneider, Majors Matter: Differences in Wages Over Time in Texas. Available at http://www.air.org/sites/ default/files/downloads/report/Majors-Matter-Differences-in-Wages-Over-Time-in-Texas-July-2016.pdf WAGES AND CERTIFICATES Consider the data in Table 2 which move from In contrast, consider the certificates with the overall averages to variation in wages across highest wages: the largest certificate programs in Texas. The • Quality Control and Safety Technologies/ range in wages both in the first and again at Technicians the 10th year after completion is wide, to say • Industrial Production Technologies/Technicians the least. • Physical Science Technologies/Technicians Ten years after completion, certificates in two • Mechanical Engineering Related fields—Communication Disorders Sciences and Technologies/Technicians Services; and Human Development, Family Studies, and Related Services—are associated Note the one phrase they share in their with median annual earnings less than the descriptions: Technologies/Technicians. Just median wages of high school graduates. below these programs is Plumbing and Related Water Supply Services—clearly a program aimed, like the others, on training students to fix things. Note too that low-paying fields in year 1 (marked in red) are similarly low-paying 10 years after. 4 ACCT Discussion Papers TABLE 2: HIGHEST AND LOWEST PAYING CERTIFICATES IN TEXAS Time to Degree Program Name Wages Year 1 Wages Year 10 (in years) Communication Disorders Sciences and Services 3.6 $22,000 $23,000 Human Development, Family Studies, and Related 3.9 $18,000 $23,000 Services Teaching Assistants/Aides 3 $16,000 $25,000 Cosmetology and Related Personal Grooming 2.2 $14,000 $25,000 Services Medians (58 certificate programs) 3.1 $26,000 $47,000 Plumbing and Related Water Supply Services 2.9 $42,000 $71,000 Quality Control and Safety Technologies/ 3.3 $45,000 $73,000 Technicians Industrial Production Technologies/Technicians 2.2 $38,000 $80,000 Physical Science Technologies/Technicians 3.9 $34,000 $82,000 Mechanical Engineering Related Technologies/ 2.1 N/A* $116,000 Technicians *Too few graduates with wage data to meet reporting requirements. Source: Compiled from data provided to College Measures by the Texas Higher Education Coordinating Board and accessible through www.launchmycareerTx.org6 “ Students who learn how to fix things or fix people win in the labor market.” ACCT Discussion Papers 5 WAGES AND ASSOCIATE DEGREES Figure 2 displays wages for associate degree Note that, once again, high-paying fields are holders in the largest programs in the state 10 either technology/technician or health care years after graduation. The wages of graduates related. Students who learn how to fix things in the highest-paying field make approximately or fix people win in the labor market. Note too four times the earnings of graduates with that the median wages of students who earned degrees in the lowest-paying field. an academic-oriented associate degree are considerably lower than the median earnings of all associate graduates, which includes the higher wages earned by graduates who completed career and technical degrees7. FIGURE 2: MEDIAN WAGES AMONG GRADUATES WITH ASSOCIATE DEGREES IN 2014 (10 YEARS AFTER COMPLETION), TEXAS Human Development, Family Studies, and Related Services $26,884 Business Operations Support and Assistant Services $34,541 Mental and Social Health and Allied Professions $35,313 Design and Applied Arts $41,098 Legal Support Services $43,646 Accounting and Related Services $44,511 Health and Medical Administrative Services $46,436 Clinical/Medical Laboratory Science/Research and Allied Professions $48,410 Academic Associate $49,724 Statewide $57,367 Computer Systems Networking and Telecommunications $61,900 Allied Health Diagnostic, Intervention, and Treatment Professions $62,842 Electrical Engineering Technologies/Technicians $63,294 Drafting/Design Engineering Technologies/Technicians $64,625 Registered Nursing, Nursing Admin, Nursing Research, and Clinical… $71,629 Electromechanical and Instrumentation and Maintenance… $83,991 Physical Science Technologies/Technicians $109,369 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 Source: Compiled from data provided to College Measures by the Texas Higher Education Coordinating Board and accessible through www.launchmycareerTx.org8 6 ACCT Discussion Papers WAGES AND BACHELOR’S DEGREES Figure 3 shows the wages of bachelor’s the largest STEM field in the nation, doesn’t graduates. Several patterns deserve attention. yield particularly high wages. Perhaps the First, as with associate degrees, there is a wage most striking data in the figure show that premium associated with concrete skills that some of the lowest-paying bachelor’s fields are can help businesses and help people keep traditional liberal arts/humanities fields: art, healthy. Second, as in most states, biology, music, and languages. FIGURE 3: MEDIAN WAGES AMONG GRADUATES WITH BACHELOR’S DEGREES IN 2014 (10 YEARS AFTER COMPLETION), TEXAS Source: Compiled from data provided to College Measures by the Texas Higher Education Coordinating Board and accessible through www.launchmycareerTx.org9 “ There are several master’s degree programs from which graduates earn less than all associate graduates...” ACCT Discussion Papers 7 Perhaps even more surprising are the data graduates earn less than all associate graduates, presented in Figure 4, which show the wages including arts, English, and social work. But of selected master’s and associate graduates the differences are even greater when we 10 years after completion. There are several compare selected master’s graduate wages master’s degree programs from which with technical/technology associate degrees. FIGURE 4: MEDIAN WAGES AMONG GRADUATES WITH MASTER’S AND ASSOCIATE DEGREES IN 2014 (10 YEARS AFTER COMPLETION), TEXAS Blue bars are median wages for Master’s graduates; green bars are median wages for Associate graduates. Source: Compiled from data provided to College Measures by the Texas Higher Education Coordinating Board and accessible through www.launchmycareerTx.org10 8 ACCT Discussion Papers