communitycolleges

Essay on labor market returns for bachelor's degrees from community colleges

With college costs soaring and the job market for new grads sputtering, one trend is worth watching: more and more states are authorizing community colleges to grant bachelor’s degrees. Already, more than 20 states — now including California, which enrolls one out of every four of the nation's community college students — have authorized community colleges to grant these degrees.

Turf will be an issue as this trend continues, but there is a division of labor between community colleges and universities that makes sense. Community colleges can and should be encouraged to develop bachelor’s-degree programs in career and technical areas and to avoid the liberal arts degrees that are integral to the mission and education delivered by universities. In any case, turf isn't the bottom line in this coming shift. The bottom line is the bottom line: Do the technical and career-oriented degrees in which community colleges specialize pay off in the labor market?

Most community colleges have a good fix on the local labor market and can create relatively low-cost programs to fill local needs. When they follow this course with career-oriented training, there is plenty of empirical evidence that community colleges can produce graduates who earn enough to put them in the middle class and who indeed often earn more than bachelor’s graduates.

This evidence can be found in studies by College Measures, which have repeatedly demonstrated that graduates with technical associate degrees, on average, outearn graduates with bachelor’s degrees (see here or the most recent report on Tennessee). In some specialties, the gap can exceed $10,000.

Most current data on the experience of community college graduates in the labor market covers the wages of students earning associate degrees, not bachelor’s degrees. But data from Florida suggest that students earning bachelor’s degrees from community colleges also fare well.

Using data from 2012, the median wage of bachelor’s graduates from Florida’s universities one year after graduation was $33,400, far lower than the median wage ($41,000) of associate graduates of the state's community colleges.

One of the most common complaints about comparing early-career earnings is that even if graduates with associate degrees earn more than bachelor’s graduates early on, the rate at which bachelor’s graduates’ earnings increase is higher -- so that the advantage quickly disappears. There is truth to this, but five years after graduation, associate-degree holders have median earnings that are still higher than bachelor’s graduates ($47,000 versus $44,000). What’s more, the median household income in Florida is $47,309 and the median per capita income is $26,451. In short, the wages of associate-degree holders put them squarely in the middle class.

The lower wages of bachelor’s graduates result in part from the fact that universities offer a full gamut of bachelor’s degrees, including many liberal arts programs whose graduates don't earn much, especially immediately after graduation. The narrowing gap over time most likely reflects the earnings increases of the many university graduates with degrees in these low-wage fields, as they finally get to launch adult lives.

While data from Florida -- where community colleges have been granting bachelor’s degrees for years -- show associate graduates holding their own against bachelor’s graduates, the data also show that community college bachelor’s degrees are well received in the labor market.

Because Florida’s community colleges only offer degrees in a limited number of fields, it’s hard to directly compare the wages earned by graduates with bachelor’s degrees from community colleges to those of university graduates in a large number of fields. Where we can make these comparisons, the data reflect well on bachelor’s degrees earned at community colleges.

Looking at three large programs of study where comparisons are possible, data show that community college bachelor’s graduates with degrees in business administration one year after graduation had median earnings of $39,000. That’s $3,000 more than the median earnings of university graduates in the same field. Community college graduates with bachelor’s degrees in registered nursing earned $61,000, which outpaced that of university nursing graduates by $10,000. And community college bachelor’s graduates with elementary education and teaching degrees out earned university graduates by several hundred dollars: $37,500 to $37,000.

Few programs available at both community colleges and universities enroll enough students to make reporting long-term wage data possible, but elementary education and teaching is an exception. Five years after completion, community college graduates in these disciplines earned $40,200, compared to university graduates at $39,400. All these data are available here.

In short, bachelor’s graduates from community colleges are doing as well as their peers with university degrees, at least in Florida. And community college graduates usually paid far less for their education.

The United States has had a long and mostly unhappy history with career and technical education. Yet, the best programs in community colleges build on the best aspects of this training: figuring out what local labor markets need and training students at relatively low cost for those jobs. As long as they focus on this part of their mission, we should applaud the expansion of these institutions’ authority from granting certificates and associate degrees to include bachelor’s degrees.

Meanwhile, community colleges should leave philosophy, history and dance to universities committed to the liberal arts. Instead, community colleges should focus on training people for opportunities to enter the labor market with good skills that put them in the middle class. With their higher wages, these community college graduates can order their Starbucks coffees from baristas with fancy philosophy degrees.

Mark Schneider is vice president for the American Institutes for Research and a former commissioner of education statistics at the U.S. Department of Education.

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Bridging the Middle-Skills Gap

Business leaders must lead efforts to close the skills gap, according to a new report from Accenture, Burning Glass Technologies and Harvard Business School. The report focuses on the demand for "middle-skills" jobs, which require more education and training than a high-school diploma but less than a four-year degree. It argues that businesses "must champion an employer-led skills-development system, in which they bring the type of rigor and discipline to sourcing middle-skills talent that they historically applied to their materials supply chains." Educators and policy makers also have roles to play in fixing the problem, which the report said is urgent.

Appeals court backs adjunct in case over First Amendment

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Appeals court sides with adjunct who says she was fired for speaking out against part-time faculty working conditions.

Akron Tops in College Completion Contest

Akron beat out 56 other cities in a contest to increase college-degree production during a four-year period that concluded in 2013. The city on Wednesday received the $1 million Talent Dividend Prize, which was sponsored by the nonprofit groups CEOs for Cities and Living Cities. The contest was based on proportional increases in degrees issued, with extra weight given to four-year and graduate degrees. Overall, the group had a 7.6 percent increase. Akron topped the list with a 20.2 percent increase. An additional 69,000 associate degrees and 55,000 bachelor's or graduate degrees were awarded by colleges in the 57 urban areas.

More Specificity on Benefits of Community College

Disadvantaged students who enroll at community colleges and who would not otherwise have attended college are more likely to earn a bachelor's degree in the future, according to a newly released research paper. And while many policies focus on getting students into four-year colleges instead of community colleges, the study found that the vast majority of community college students do not suffer a penalty to their eventual likelihood of completing a bachelor's degree.

The study is based on the college outcomes of high school graduates from Chicago Public Schools. Sara Goldrick-Rab, a professor of educational policy studies and sociology at the University of Wisconsin at Madison; Jennie Brand, an associate professor of sociology at UCLA; and Fabian T. Pfeffer, a research assistant professor at the University of Michigan, are its authors.

"The anti-community college stigma is overblown and could do real harm to students who find community college to be a very good, low-cost option," Goldrick-Rab said in an email.

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Lessons Learned on Competency-Based Education

Western Governors University has unveiled a new website, dubbed CBEInfo, which seeks to be a discussion space for lessons from the nonprofit university's collaborations with community colleges. Western Governors, which offers competency-based credentials, has worked with 10 community colleges around the country to help them create competency-based associate degree programs. The website includes information about the development of those programs, and seeks input from faculty members and college administrators.

Reverse Transfer Project from Clearinghouse

The National Student Clearinghouse this week announced it would use a grant from the Lumina Foundation to create a national, automated system for exchanging "reverse transfer" student data. Reverse transfer in this case refers to when a transfer student's four-year institution sends credits back to a two-year institution from which the student transferred. The nonprofit Clearinghouse wants to help by creating a standardized and centralized way for colleges to exchange reverse-transfer credits. As many as two million students could earn associate degrees through the project, according to the Clearinghouse.

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Federal Policy and the Skills Gap

The relationship between federal policy and the skills gap is misunderstood, according to a new report from the New America Foundation. The paper looks at five "policy gaps" in the Higher Education Act, the law governing federal student aid programs, that could be closed to build stronger connections between learning and work. Those gaps include an excessive focus on institutional and internal indicators of quality; a lack of attention to student employment outcomes; and aid eligibility requirements that fall short of the needs of adult learners, according to the report, which was authored by Mary Alice McCarthy, a senior policy analyst at the foundation who previously worked for the U.S. Department of Labor and the Education Department.

Essay questions free community college policies

Several states have explored the possibility of so-called “free community college” programs, which would cover the cost of tuition and fees for recent high school graduates who meet certain other eligibility criteria. Tennessee was the first state to pass such a plan, making first-time, full-time students who file the FAFSA and complete eight hours of community service each semester eligible for two years of tuition and fee waivers. Legislators in Mississippi, Oregon, and Texas have proposed similar plans, although none of those have been adopted at this time.

The most recent plan for free community college comes from the city of Chicago, where Mayor Rahm Emanuel announced that the city would cover up to three years of tuition and fees for eligible graduates of the Chicago Public Schools. In order to be eligible, students must have a 3.0 high school grade-point average, not require remediation in math or English, and file the FAFSA. (It appears that part-time students will be eligible for the program, unlike in the state proposals.) The district estimates that about 3,000 students would qualify for the program out of the roughly 20,000 students who graduate each year.

Who Benefits?

All of these programs operate as last-dollar scholarships, meaning that the city or state makes their contribution — if any — to the student after federal grant aid (primarily the Pell Grant) has already been applied. In Chicago, tuition and fees for a full-time student are approximately $2,536, less than half of the maximum Pell Grant. District officials estimate that 85 percent of students’ tuition and fees will be covered by Pell Grants — meaning that the city’s contribution will be zero in most cases. This contributes to an estimated cost of about $2 million in the first year.

Looking more broadly, these “free college” programs will give very little additional money to students with the greatest financial need. In every state except New Hampshire and South Dakota, the average tuition and fees at community colleges was lower than the maximum Pell Grant of $5,645 in the 2013-14 academic year. Data from the National Postsecondary Student Aid Study (NPSAS), a nationally representative sample of students enrolled in the 2011-12 academic year, show that 38 percent of community college students had their tuition and fees entirely covered by grant aid. An additional 33 percent of students paid less than $1,000 out of pocket for tuition and fees. Eighty-five percent of Pell recipients at community colleges had sufficient grant aid to cover tuition and fees, meaning they would get no additional money from a “free college” program.

Bryce McKibben of the Association of Community College Trustees has written about how Tennessee’s program will mainly benefit students from middle-income and higher-income families. NPSAS data for community college students show that relatively few low-income students nationwide will benefit from these programs, as most of them already have tuition and fees paid for by other sources.

Tuition and Fees Not Covered by Grant Aid at Community Colleges, by Income

Income quartile

$0

$1-$999

$1,000-$2,999

$3,000+

Lowest

68.2

18.6

10.1

3.2

Second

36.6

28.7

26.8

7.9

Third

11.2

36.0

38.9

13.8

Top

8.0

34.3

42.7

15.1

Source: 2011-12 National Postsecondary Student Aid Study

Note: Sample includes dependent students attending community colleges.

Costs Are More Than Tuition and Fees

At community colleges, tuition and fees are a small portion of the total cost of attendance. Students also have to pay for books and other supplies, a place to live, and everyday expenses necessary to live while also being a student. While some argue that living costs shouldn’t be subsidized by financial aid because they are also necessary to live, being able to cover these costs is critical to being successful in college. The “free college” programs do not cover any of the other expenses, meaning that students must turn to loans or self-support in order to finance their education.

Only 2 percent of community college students receiving Pell Grants in the NPSAS have their full cost of attendance met by grant aid. Four in 10 Pell recipients have to cover less than $5,000 in costs, while an additional 37 percent have to cover between $5,000 and $10,000. The median student with a zero expected family contribution has to come up with just over $5,000 to cover estimated living costs — something that the Chicago program and other similar programs do nothing to alleviate.

Defining “College Ready”

Unlike some other last-dollar scholarship programs, Chicago’s program has a substantial merit component. The requirements of a 3.0 high school grade point average and testing into college-level math and English leave out the vast majority of community college students. Ninety-four percent of Chicago Public Schools graduates required remediation in math in 2009, suggesting that very few students are able to qualify for the city’s program. About 40 percent of community college students in the NPSAS had taken at least one remedial course, with slightly higher rates for Pell recipients. This means that other states or cities considering merit components are likely to reduce the potential pool of recipients — and reduce their costs.  

Making grant receipt contingent on placement test scores could potentially have negative effects on students who end up in remediation. Research by Jennie Brand, Fabian Pfeffer, and Sara Goldrick-Rab using Chicago Public Schools data has found that attending community colleges results in a higher bachelor’s-degree completion rate for disadvantaged students, many of whom are unlikely to enroll in college without the option of a community college. Students who expect to get a scholarship under the Chicago program but are then deemed ineligible due to their test score may be more likely to drop out of college due to the disappointment of not getting the award. It is important to note this effect could even exist for students who would get no additional money under the Chicago program — as long as the perception is that the program is giving them money that is actually being provided by the Pell Grant.

How to Improve “Free College” Programs

“Free college” programs do have some positive attributes, in spite of the limitations noted above. Some students from middle-income families will get additional financial aid as a result of the program. But the concept of “free college” could even benefit Pell recipients who are unlikely to see any additional financial aid under the program. Research has shown that making students aware of their financial aid eligibility results in increased college attendance rates, and similar effects could result due to the programs' publicity. For those reasons, it is important that the Chicago and Tennessee programs be rigorously evaluated to see who benefits, and for what groups of students the program passes a cost-effectiveness test.

These programs should also provide some additional financial aid to students whose Pell Grants cover tuition and fees in order to cover living costs. Even a $500 award at the beginning of the semester would help low-income students manage upfront costs like books and rent payments, and could be paid for by slightly reducing awards for students who are not Pell-eligible. The program would still give larger benefits to financially squeezed middle-income families, but students with the greatest financial need would also see some additional money.

It is also important to consider extending the programs to returning adult students, who typically do not qualify for these programs. The median age of community college students is approximately 23, and a program that provides assistance to these students (most of whom have exceptional financial need) could prove to be very beneficial. Finally, it is important to publicize these programs (and their conditions) widely so students and their families know that community college can be an affordable, high-quality educational option.

Robert Kelchen (@rkelchen) is an assistant professor in the department of education leadership, management, and policy at Seton Hall University and blogs at Kelchen on Education. All opinions are his own.

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2 New Plans for Free Community College Tuition

Two new plans were announced Wednesday for free community college tuition:

  • Chicago Mayor Rahm Emanuel announced that the city would provide scholarships for tuition, fees and books for all students who graduate from the Chicago public schools with a 3.0 grade-point average or higher, and who place into college-level mathematics and English at the City Colleges of Chicago.
  • Cuesta College, a community college in California, announced that it will pay for tuition and fees for all graduates of a local county high school district for the first year of their programs.
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