Yesterday, I wrote about the Federal Reserve Board’s Survey of Household Economics and Decisionmaking (SHED). The “SHED report” is the Fed’s annual effort to take the economic temperature of American households.
The current SHED report, which was released last week, shows – among many other things – that people with lower post-secondary educational attainment feel less secure about their finances today than they did a year ago. By itself, that says something, but the SHED data reveals even more about the relationship between educational attainment and financial security.
Financial confidence among respondents with “some college or an associate degree” dropped further this year (3%) than any other cohort in the study. Among respondents who had earned a bachelor’s degree or better, financial confidence declined by just one percent. Financial confidence remained flat at 63% among respondents who had earned a high school diploma. For respondents who had not earned a high school diploma, financial confidence dropped from 49% to 48%.
Of more concern, as the financial confidence of respondents with some college or an associate degree continues to slide, the financial conditions among respondents who have completed only a high school diploma have stayed the same. 2023 had the effect of closing the “financial stability gap” between those who have earned at least some college credit and those who have not. Currently, associate degrees (or college credit with no degree) offer only the slimmest (4%) bump in financial confidence. Comparatively, the financial confidence gap between a bachelor’s degree and an associate degree is 21%.
There is not enough financial difference between a high school diploma and an associate degree to make a community college program worth the time and effort required to earn one.
There it is.
SHED shows uncertainty in community college degree value
That’s not all. According to the 2013 SHED report, only 55% of respondents with only a high school diploma felt financially confident. Ten years later that percentage had increased by 8% to 63%. In contrast, in 2013, the percentage of community college graduates who felt financially confident was 62%. By 2023, that percentage was 67% – an increase of just 5%. In 2017, the percentage of both high school and community college graduates who felt financially confident was exactly the same – 69%.
Who bears the responsibility for failing to differentiate or increase the economic value of an associate degree? In some states, community colleges receive most of their funding from the state, so one could argue that state funding may dictate instructional investment levels.
In Michigan, property taxes provide additional local funding from within the community college district. Washtenaw Community College has four separate millages – including two permanent ones. This year, Washtenaw County taxpayers will provide more than $70M in local funding to WCC. (Many community colleges don’t even have a $70M budget.)
WCC’s suddenly risky certificate approach virtually guarantees low enrollment, as does its failure to deliver new high-wage, high-demand degree programs and programs in emerging technologies.
WCC’s enrollment peaked in 2010 as the Great Recession began to ease. After that time, its instructional expenses dropped as property tax revenues began to climb. The administration could have invested that money into developing authentically new instructional programs in growth areas. That would have attracted economic development to Washtenaw County. Instead, the college plowed the extra funds into expanding the size of the administration, which cheated the entire community of its intended investment in education.
We need Trustees who understand both the meaning and necessity of oversight.
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