The results of the most recent Survey of Household Economics and Decisionmaking (SHED), which the Federal Reserve conducts annually, shine some light on people’s perceptions of higher education. In the 2022 SHED survey, the perceived value of associate degrees depends upon who you ask.
For people aged 60 or above (Baby Boomers) who earned an associate degree, 55% of respondents said the benefits of their degree outweighed its cost. Among people between the ages of 45 and 59 (Generation X), only 45% of respondents said that the benefits outweighed the costs. Looking at those between the ages of 30 and 44 (Millennials), just 30% said that the benefits of their associate degree exceeded its cost. Among adults aged 18-29 (Generation Z), one-third said that the benefits of the degree outweighed its cost.
A couple of things could be at work here. Older workers may increasingly benefit from the combination of their degree and work experience. Those with the most experience may reap the largest benefits. Additionally, the cost of an associate degree for the oldest workers in the survey may have been comparatively lower than it was in later years. The low cost could increase the perception of “return on investment.”
The youngest workers in the survey have had the least amount of time to benefit from their associate degree and may still be burdened with student loan debt for it. This shifts the calculation of value significantly. Additionally, in the recent past, community colleges have focused on developing programs that lead to low-wage jobs. At the same time, they have prioritized rapid entry into the workforce over return-on-investment for the students.
Changing associate degrees perception may change its value
This is a mistake because it lowers the perceived value of a community college credential for the people who most need an immediate return on their investment of time and money. When prospective students hear two-thirds of recent graduates say that their associate degree’s benefits did not outweigh its cost, the message is clear.
“Don’t make the mistake I made.”
So, it’s not surprising that community college enrollments have sharply declined.
Community colleges must focus on returning substantial and easily identifiable benefits to new associate degree holders. The “substantial and easily identifiable benefits” that people expect include higher entry-level salaries, better benefits, and more room for promotion. This will require a thorough re-examination of the current value of a degree program to identify the low-cost, high-value changes that could substantially and rapidly increase the benefits of the degree.
The perception among the majority of associate degree holders that their degree has no value influences prospective future students. The only way to change this perception is to change the results of the cost-benefit comparison.
Photo Credit: Régine Debatty, via Flickr