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Measuring the returns on college

Welcome back. This week’s issue looks at several new studies on the value of college credentials, wage variation in allied health, Kaplan’s Career Core, and three new nondegree institutions. (Sign up here to get this newsletter.)


Low Wage, High Value

Broad generalizations about the value of attending college aren’t worth much. But a growing amount of granular data about labor market returns for credentials is emerging, with breakdowns based on student demographics.

For example, an August analysis of program-level ROI data by Michael Itzkowitz, a senior fellow at Third Way, generated headlines with findings that included a serious mismatch between certificate programs with the best payoff and the ones that enroll the most students.

And the Postsecondary Value Commission built on its extensive May report this week by releasing research papers that undergird the project. One paper, from Sandy Baum, a senior fellow at the Urban Institute, and Lorelle Espinosa, program director at the Alfred P. Sloan Foundation, looks at low-wage jobs that provide a high value to society, and to many of the people who hold those jobs.

Over at Work Shift, Elyse Ashburn pulls together findings from this new research on college earnings, including a study released today by the Georgetown University Center on Education and the Workforce. Here are some highlights from that report and two other recent ones.

More advanced credentials are linked to higher lifetime earnings. But the Georgetown center found plenty of exceptions within those broad averages:

  • 16 percent of high school graduates and 23 percent of workers with some college credits and no degree earn more than half of workers with a bachelor’s degree.
  • Women earn less than men across education levels, while Black and Latino workers earn less than their white and Asian American counterparts.

A new Brookings Institution analysis of program-level data on earnings and student-loan repayment rates across more than 1,200 community colleges found that:

  • Programs enrolling relatively large shares of Black, Latino, and Native American students typically have worse labor market returns.
  • Student demographics aren’t the primary explanation for lower ROI. The key driver is that students from minority groups are disproportionately enrolled in fields that tend to pay less.

A working paper published in September by the National Bureau of Economic Research calculated the value added by four-year colleges and universities in Texas. It found:

  • Wide variation in raw graduation and earnings outcomes largely vanished when controlling for student characteristics.
  • How much money a college has is positively correlated with the value add its graduates see in the job market.

For more details on these and other studies, click on over to Work Shift.

Income Inequality

Reporting by Amy Morona of Crain’s Cleveland Business shows why variation in earnings even within specific fields can lead to misleading conclusions about the value of college credentials. 

For example, the median annual pay two years after completion for graduates of Cuyahoga Community College’s certificate programs in diagnostic, intervention, and treatment professions is roughly $52K, according to the Third Way analysis—about $30K more than a typical Ohio high school graduate earns. But certificate completers of the medical assistant program from Tri-C only made about $8K more than a high school graduate.

Graduates of the medical assisting program at the Polaris Career Center, a nonprofit vocational institution in Ohio that serves adult learners and high school students, earned $2K less on average than Ohio workers with a high school credential, Third Way found. 

Morona reported that leaders at Polaris were surprised by those findings. And they’ve pushed local hospitals to pay medical assistants more.

“We’ve been rather frank about starting salaries and what an entry-level medical assistant should be paid,” said Karen Rayk, the adult education director at Polaris.

Many students who are enrolled in the medical assistant program at Polaris want to use the job as a stepping-stone to better-paying roles, like nursing. But stackable credential pathways in allied health—for medical assistants to become certified phlebotomy technicians or even nurses—aren’t easy to navigate and are far from the norm in the profession.

The demand for medical assistants is exploding, with the federal government projecting an 18 percent increase in these roles between 2020 and 2030. The median pay, however, is $17.23 an hour—$36K per year.

The demand-to-wage mismatch is even worse for home health aides, as this anxiety-inducing chart from Visual Capitalist rams home. While the profession is expected to grow by 33 percent, or more than 1.1 million employees in the next decade, it has a median annual pay of just $27K. The same goes for early childcare workers, who have a median annual wage of $24K nationwide—or about $18K per year in El Paso, Tex., as Jewél Jackson of El Paso Matters reported last week.

The Bottom Line: The per-capita GDP of $64K in this country is more than double what we pay most of the people who take care of our children, elderly relatives, and us when we’re sick. And attempts to improve postsecondary education outcomes for students in these high-demand fields will fall short if the jobs don’t pay family-sustaining wages.

Kaplan’s ‘Career Core’

Some colleges are teaming up with outside groups to find mentors who can help students explore careers and build up the social capital to land a job. The Chicago-based One Million Degrees, for example, taps volunteers from businesses and professional associations to serve as professional coaches to students who are enrolled at the City Colleges of Chicago.

Kaplan recently announced a new spin on this service. The education company, which years ago stopped issuing its own university degrees, will offer shared career services to an initial group of higher education partners, including Florida International University, Point Loma Nazarene University, and the University of Arizona.

The new Career Core is designed to extend even high-end university career services, with a particular focus on underserved students. For a fee, universities will be able to connect students with professional career advisors who specialize in particular fields. Students at participating institutions also will be able to access course content on careers, which Kaplan designed in partnership with Wake Forest University.

The project has been in the works for three years, says Brandon Busteed, Kaplan’s chief partnership officer and global head of learn-work innovation. The project began with scoping which parts of Wake Forest’s nationally recognized approach to career services could be offered at scale through a pooled model.

“We’re building a team of industry and role-specific advisors,” Busteed says. The diverse group of advisors will have experience in the fields students are interested in breaking into, he says, but they will also be trained as coaches. “That’s not something for an individual university to build.”

Shawn VanDerziel, executive director of the National Association of Colleges and Employers, says he can see the potential gains for students if multiple institutions can band together to provide career services and resources that they would not be able to offer on their own. This is particularly true, he says, if students are given practical tools and experiences to improve their confidence as well as their marketability to employers.

“Students, particularly those that are the first generation to go to college, don’t always have access to professionals that are in the industries or careers they are presently exploring in their coursework,” says VanDerziel. “Providing an opportunity for these students to gain practical insight from them in a thoughtful, structured way could have many benefits.”

Whether Career Core takes off remains TBD. But Busteed says many colleges appear to be making career exploration more of a priority, particularly where there’s buy-in from senior leadership.

“The value of career services is going to be a differentiator,” he says.

Nondegree Campuses

Several states and their university or college systems are ramping up new workforce education programs that are not focused on degrees.

For example, Tennessee announced last week that it will create a new Tennessee College of Applied Technology at a forthcoming $5.6B electric vehicle and battery manufacturing “megasite” near Memphis. The joint training center will offer certificates and customized training with Ford and SK Innovations.

The Maine Community College System is using $60M to create a virtual center for free or low-cost workforce training it plans to offer to more than 24,000 front-line Maine workers during the next four years. Funds come from a new $15.5M grant from the Harold Alfond Foundation, combined with $35M from the state’s jobs and recovery plan and $10 million in matching private sector money.

The center will feature short-term programs. It will be buttressed by a compact more than 80 businesses have signed with the community college system, in which they pledged to help pay for employees to earn a college degree or other credential of value.

Finally, Colorado State University plans to open a new nondegree campus in Denver next year. The $200M CSU Spur campus in north Denver initially will feature three buildings, organized around educational programming on animal and human health, food and agriculture, and water.

The campus will be devoted to attracting future students, the Denver Post reported. The CSU system says it plans to invite every junior high student along Colorado’s Front Range to visit the campus twice a year to observe researchers at the campus.

The Kicker: “We want to pound home the message that there is a pathway to college,” Tony Frank, chancellor of the CSU system, told the newspaper. “We are trying to go way back—to the grade-school level—and embed experiential learning and implant the idea at an early age that college is really possible.”

Work Shift: From Dance to PR

This article by Gabriela Rivero is the first in an occasional series in Work Shift about about how the pandemic has changed people’s education and career paths. In it, 24-year-old Arianna Menzies describes how she found a new path after Covid upended her dance career. Rivero’s work on this project was part of a micro-internship.

Open Tabs

Digital Skills

Closing the digital skills gap for older workers could have an especially large payoff for historically oppressed groups, according to research published last month by the Urban Institute. The report’s authors recommend that education programs aimed at older workers should consider ways to build confidence, leverage peer learning, and teach digital skills in context. 

Online Learning

Udemy, an online course platform, has filed for an initial public offering. Instructors are paid based on enrollments under Udemy’s model—paid instructors made $161M last year on the platform, which saw its revenue grow by 40 percent in 2020, to $480M, according to the filing. The company was valued at $3.3B last year, Reuters reported, and it is expected to go public for much more.

Youth Apprenticeships

The National Governors Association and New America have released a self-assessment tool for youth apprenticeship programs. The assessment is focused on widely accepted principles of quality for youth apprenticeships, including whether they feature classroom-based instruction and lead to a portable, industry-recognized credential.

Nondegree Workers

Most job seekers who work in a job that doesn’t require a college degree want to stay in their current field, according to a national survey of 1,000 middle-skill workers conducted this spring by Penn Foster, an online education provider. If they were to change jobs, respondents were much more likely to say they’d need to learn new skills at work than with a certificate or training program.

Wealth Gaps

“The federal government needs to construct a strong floor of consumer protection that applies to all colleges, great and small,” Kevin Carey, vice president for education policy and knowledge management at New America, wrote in his contribution to a collection of essays on closing wealth gaps. In his essay, Oren Cass, executive director of American Compass, calls for gradually redirecting as much as half of federal subsidies for higher education to noncollege student pathways.

Let me know what I missed? Catch you next week. —@paulfain

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