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Median earnings show value of associate degrees, certificates

If you want a visual explanation of why community college enrollment is tanking, look no farther than The HEA Group’s analysis of US Department of Education data on post-graduation earnings. The data, which were released in April, show the median earnings of graduates four years after leaving school. The data show earnings by degree, school, and major.

Among all programs (which include bachelor’s degrees, associate degrees, and non-degree certificates) two-thirds enable graduates to earn at least $40,000 annually. When you look at the data by degree, however, 80% of bachelor’s degree programs produce median earnings of at least $40,000. Only 50% of associate degrees provide that kind of economic boost, and fewer than one-third of non-degree certificates offer that earning potential.

The $30,000-$40,000 range is ALICE household territory. Only 17% of bachelor’s degree holders earn in this range four years after graduation. Thirty-three percent of associate degrees produce median earnings in this range. Twenty-three percent of non-degree certificates have this earning potential.

The $20,000-$30,000 range is poverty country. Only three percent of bachelor’s degree holders find themselves at this earning level. Fifteen percent of two-year degrees will produce median earnings in this range. Non-degree certificates are the category-killer here. Thirty-two percent of non-degree certificates generate income in this range.

In the $0-$20,000 range, no bachelor’s degrees in the data showed this earning potential and only one percent of associate degrees earned in this range. But 14% of non-degree certificates produced this level of annual earnings.

So according to the data, 69% of non-degree certificates will produce less than $40,000 in earnings four years after the student acquires one. This compares to 50% of associate degrees and 20% of bachelor’s degrees with poor earning potentials.

Half of two-year programs offer sub-par median earnings

Yet, for some reason, WCC favors non-degree certificates. Currently, WCC offers about twice as many non-degree certificates as associate degrees. The HEA Group report acknowledges that while non-degree certificates offer a relatively short on-ramp to earnings of some sort, they also pose the greatest long-term economic risk to the earner. Seven of ten certificates are worthless in terms of earning potential.

The great shortcoming of the US Department of Education data is that it doesn’t show the earning potential of all degree programs at all schools. But the list does offer a place to start.

For example, looking at the fields of study shows that some degree programs at some institutions produce adequate income following graduation, while others in the same field do not. It raises the question of whether institutions can tweak sub-par programs to raise their earning potential.

In other cases, institutions cannot create a program in a particular field of study that provides adequate earnings. That’s an indication that the field is not in demand, or that employers pay chronically low wages. It’s a way to red-flag those programs for potential elimination. (If graduates can never earn a living wage, why offer the program at all?)

The field of study also identifies programs that are solidly successful and produce income that enables graduates to live comfortably in the middle class. In a few cases, associate degrees can lead to six-figure annual salaries, although this definitely isn’t the norm. It can serve as a reference for community colleges looking to increase the post-graduation earning potential of their course catalog.

It’s a start, but community colleges will need to do better than 50% if they want to remain competitive in the higher education landscape.

Photo Credit: JD Hancock, via Flickr