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Students in graduation gowns throw their caps into the air.

Total degrees earned and first degrees earned are trending downward, partly as a result of pandemic enrollment declines.

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The number of students earning college degrees fell for two consecutive years after at least seven years of slight increases, according to a new report from the National Student Clearinghouse Research Center. Also, fewer learners who held a prior credential went on to earn another one. Certificate earners, however, are growing.

The latest “Undergraduate Degree Earners” report, released Thursday, showed that almost 100,000 fewer people earned bachelor’s and associate degrees or certificates during the 2022–23 academic year, a 2.8 percent decrease. The number of first-time credential earners fell by the same percentage. Meanwhile, fewer students earned an associate degree than in the past decade and the number of bachelor’s degree earners hasn’t been this low since the 2015–16 academic year.

Doug Shapiro, executive director of the National Student Clearinghouse Research Center, said in a media briefing Wednesday that the decline in new undergraduate credential earners is “the steepest that we’ve ever recorded.”

Among students completing their first credentials, associate degree earners had the most precipitous drop, an 8-percent decline, compared to the number of first-time bachelor’s degree earners which fell 3 percent, Shapiro said. He believes staggering enrollment declines during the pandemic, particularly at community colleges, play a major role in the downward trends.

Charles Ansell, vice president for research, policy and advocacy at Complete College America, agreed that higher ed still hasn’t recovered from its COVID-19 enrollment losses, particularly among the most “precarious” students juggling jobs and other responsibilities. He added that some regions have been hit with a decline in the number of traditional-aged students, as well. Additionally, the faltering rollout of the new Free Application for Federal Student Aid (FASFA) could push enrollments, and future degrees earned, further downward as prospective students are deterred by the confusion, he said.

He noted that no matter how successful student success reforms, such as corequisite education, are at helping students graduate, fewer students in college means fewer degrees earned. This outcome is “very troubling” because of possible downstream effects, including a dearth of qualified workers for an “internationally competitive” labor economy and educated citizens to ensure a “thriving democracy.”

The report also found that the number of people completing credentials, for the first time and overall, declined across all racial groups. Notably, the number of Hispanic and multiracial students earning their first credentials declined for the first time since at least 2016. All age groups also experienced declines in credential earners, except for learners age 20 and below. Four-year for-profit universities were the only type of institution that saw growth in first-time credential completions.

Shalin Jyotishi, senior adviser on education, labor and the future of work for New America, an education policy think tank, said in an email that the data about declines in degrees is also “concerning” because of the economic gains lost for individual students.

“The data are clear that a college degree remains a sound investment despite raising costs,” he said. “That being said, let this be yet another signal to policymakers and college leaders about the need for continued reform, especially around affordability, accessibility and program alignment to labor market needs.”

A Lack of Stacking

The report also found that fewer previous graduates returned to college to earn more credentials. The number of students with certificates and earning associate degrees fell 2.5 percent, associate degree holders earning bachelor’s degrees decreased 3.3 percent and graduates with bachelor’s degrees or master’s degrees earning certificates declined 3.7 percent. More than half of the decline, 54.6 percent, can be attributed to students with associate degrees not continuing on to earn bachelor’s degrees, the report noted. However, the number of students who earned certificates and completed another certificate or a bachelor’s degree increased, 1.7 percent and 4.4 percent respectively.

Shapiro said the drop in associate degree earners continuing on to earn bachelor’s degrees seems like “very bad news,” given transfer pathways from community colleges to four-year universities are “one of the most promising paths to access to the bachelor’s degree for lower income and disadvantaged students.”

Jyotishi added that credential holders not going back to pursue additional degrees is a bad sign for colleges that have sought to design programs that lead students from one credential to another, such as certificate programs that offer credits toward associate degrees.

That finding could indicate that “so-called ‘stackable credential pathways’ too often exist in principle and not in practice, or not at all” if students aren’t actually using them, he said. “We need to get more precise about how, why and when college graduates can upskill and reskill through stackable credentials. We need credentials to align with career ladders so that they better lend themselves as vehicles for career preparation as well as upskilling and reskilling.”

The Ascent of Certificates

The number of certificate earners, meanwhile, is higher than it’s been in a decade, the report found. Students who earned these kinds of credentials increased by about 4 percent.

Notably, women who earned their first certificates increased by 6.2 percent, compared to a 5.3 percent increase among men, which was a contrast to the previous year when men far outpaced women in earning these kinds of credentials. Certain fields, such as mechanic and repair technologies and construction trades, saw major gains among first-time certificate earners. Certificates also proved popular among younger students. The number of students between the ages of 18 and 20 earning their first certificates grew 11.3 percent, accounting for half the growth in first-time certificate earners, the report found.

Beatrix Randolph, a research analyst at the National Student Clearinghouse Research Center, also said at the media briefing that the number of first-time certificate earners increased among people under the age of 18, a 6.2 percent bump, which suggests that high school students in dual enrollment programs are earning certificates as well.

Whether the rise in certificates is a positive or negative trend is up for debate.

Jytoshi said he’s increasingly concerned about the “hype around certificates.”

“Quality short-term training for short-term gain makes a lot of sense in cases of upskilling, reskilling or to jump-start a career and degree attainment journey. Unfortunately, the payoff of short-term credentials has been shown to be on the decline,” he said, citing a January report from the Lumina Foundation which found a decline in certificate earners with significant wage premiums.

“Just because fruit loop sales are increasing doesn’t mean more fruit loop consumption will lead to healthier people,” he added. He wants policymakers to be “mindful” of whether certificates are delivering returns on investment for graduates.

Ansell views the growth of certificates as “both very good news and also kind of bad news.”

He noted that certificates tend to prepare students for specific kinds of jobs, some of which could be automated in the future, while degrees tend to have “a lot more labor market value” and include broadly applicable general education courses.

For those reasons, “you don’t want degrees to go down,” he said.

At the same time, he believes certificates, assuming they’re “certificates of value,” offer students flexibility, in terms of how long it takes to earn a credential, and teach them concrete skills immediately applicable in a job market that’s rapidly changing because of technology advancements like generative AI.

“Let’s be realistic about what people need to jump in their career ladder and then let’s also encourage them to stack that into a degree program …” he said “We don’t know what this economy holds, and it’s always going to be in a student’s best interest to continue that education at least through the baccalaureate level. That way, they have full marketability.”

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