Many certificate programs would fail a proposed earnings test

Many certificate programs would fail an earnings test the Biden administration is considering, including some that prepare medical assistants and early-childhood educators. Also, Coursera expands its push on professional certificates from Big Tech companies.

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The High School Wage Threshold

Government attempts to tie funding for colleges to measures of how their graduates fare in the job market are controversial and tricky to design. Similarly, the student success performance formulas most states now use to fund public colleges can be ineffective or lead to unintended consequences.

Even so, ROI metrics are certain to become more common in higher education policy. The Biden administration, for example, is mulling a new wage floor for postsecondary career education.

The proposal, under a likely new gainful-employment rule, would apply to nondegree programs at public and private colleges and to all for-profit college programs. It would compare median earnings of those programs’ graduates to those of workers between the ages of 25 and 34 in their state who hold only a high school diploma or GED.

The earnings threshold would be roughly $26K, with a range of $21K to $31K depending on the state. Advocates say such a metric is a simple and fair way to require minimal gains from a college education. Why attend college if you earn less than people who didn’t?

Yet a substantial number of programs covered by gainful employment would fail the high school earnings test, according to a recent analysis by Jason Delisle, a senior policy fellow at the Urban Institute, and Jason Cohn, a research analyst at the institute. 

Several integral job roles across the economy could be affected, because they tend to pay low enough wages that some college certificate programs in those fields could lose federal aid eligibility under such a rule. Those occupations include medical assisting, early-childhood education, and home health aides.

Education quality probably isn’t a major driver of wages in those industries, says Michelle Van Noy, director of the education and employment research center at Rutgers University.

“The problem that we’re grappling with is a labor market challenge,” she says. “If we obscure the problem, we obscure the solution.”

Colleges can contribute to unsustainable wages in an industry, however. Van Noy cites an example where college certificate programs were flooding a local economy with home health aides. Employers were churning through aides, whom they didn’t pay enough, but the incentive to raise salaries—given the easy supply of new workers—was missing.

Likewise, some colleges have misled students about their career prospects in lower-wage jobs. 

Corinthian Colleges had one of the nation’s biggest medical assistant programs before its collapse during the Obama administration. Yet its Everest Milwaukee campus counted medical assistant graduates as being placed in their field, even if they were hired into home healthcare positions or, in one case, as a barber. Few, if any, medical assistant graduates were earning wages as high as the projections they heard from Everest admissions reps.  

“Every institution needs to engage with the labor market,” Van Noy says.

Opinion: Why a “college and” approach is necessary to rebuild the middle class College can’t be the only path to the middle class, writes Kate Naranjo of Opportunity@Work. We’ve neglected to invest in other routes for too long.

Market Failures: In some cases, structural economic problems go much deeper than what higher education can control. 

For example, childcare workers in the U.S. make $24K per year on average, according to a recent report from the U.S. Treasury. Up to 40 percent of the childcare workforce leaves their jobs each year. Yet providers typically can’t pay much more, given the industry’s tight margins. Many survive by keeping staffing and other costs low, according to the report, which concludes that the childcare system suffers from market failures and requires government support.

Due to concerns about low wages, many colleges will not offer early-childhood education certificates. Others have quietly dropped programs.

Medical assistants face a similarly challenging job market. Median wages are higher—$38K per year nationally. But burnout and turnover among these entry-level workers spiked during the pandemic. Almost a quarter of medical assistant positions (24 percent) at primary care facilities in California were vacant last year, a rate that nearly tripled from the previous year.

Some industry observers say medical assistant wages in certain markets would not clear the high school earnings threshold.

Medical assistants typically make at least $40K per year in the Minneapolis metro area. But the biggest draws are the career paths, the benefits these jobs pay (often 30 percent over base wages), and the stable hours they offer for people who are accustomed to holding as many as three jobs, says Deb Bushway, president and CEO of Northwestern Health Sciences University.

If benefits don’t count toward a wage threshold, such a rule “could indeed threaten programs such as ours when employers are begging for these staff,” Bushway says.

Programs that would fail such a test are disproportionately short-term ones offered by for-profit colleges, says Michael Itzkowitz, a senior fellow with Third Way and former Education Department official who analyzes college ROI data. He also says the rule would give programs two years to get above the wage floor before they would lose access to federal grants and loans.

“You should still be able to meet this very minimal economic threshold,” says Itzkowitz. “This is actionable data. It doesn’t mean you just shut down a program.”

The issue with low-performing programs is about more than living wages for their graduates, says Mamie Voight, president and CEO of the Institute for Higher Education Policy, which played a lead role in the creation of a broad 2021 report on value in higher education.

“It’s especially a problem if students are taking on debt,” she says, “and if students are spending a lot of money that is not going to provide them that kind of economic mobility.”

Besides addressing cost, Voight says, the high school earnings debate involves big policy questions on equity. 

“This all signals the need for some broader societal conversations about adequate compensation for careers that we do need,” she says, including medical assistants and early-childhood educators. “We need to make sure that we are compensating those individuals fairly and adequately, particularly because they’re often women of color.”

What do you think? Click here for a reader poll on the wage threshold idea.

Universities and Tech Brands

Coursera is placing more emphasis on professional certificates from major technology companies. 

With its new Career Academy, the online platform will make it easier for partner universities to offer students “job-relevant skill development” with roughly 20 entry-level certificates from Google, IBM, Meta, Salesforce, and others. The certificates, which are designed for learners without a degree or work experience to complete in six to eight months, can be used as an on-ramp to a degree-completion program or as an add-on to a degree.

“We’re bringing the world’s best companies to universities,” says Scott Shireman, global head of Coursera for Campus. “This is last-mile career training” for in-demand jobs.

Students who are enrolled in an institution’s Career Academy can access a new interface that’s organized by job roles. There they can explore career paths and skills requirements for tech roles, as well as the median regional wages for those jobs.

The portal is designed to give students “everything they need to make an informed decision,” Shireman says.

Career Academy also features guided projects that include hands-on learning and assessments. Students can complete these projects in under two hours, and potentially use that experience in job searches. For example, they can give UX design a whirl by building projects using Figma and Adobe Creative Cloud. 

Career Academy also is aimed at state and local governments, says Shireman, as well as corporate training programs for entry-level workers.

The Kicker: “This will cover the skills you will need for an entry-level job,” Shireman says. “Students want this.”

Open Tabs

Enrollment Crisis

The number of U.S. students transferring from a community college to a four-year institution dropped 11.6 percent this spring, reports the National Student Clearinghouse Research Center. The likely cause was the ripple effect of sharp, pandemic-related enrollment drops at two-year colleges. “Lower-income students seeking more affordable degree options are being squeezed out,” said Doug Shapiro, the center’s executive director.

Virginia’s G3 scholarship could help slow the enrollment decline at the state’s two-year colleges, which are down 50K students, or 25 percent, over the past decade, reports Eric Kolenich for the Richmond Times-Dispatch. Enrollments grew for recipients of the last-dollar scholarship, which covers all costs for lower-income students in high-demand certificate programs.

The pandemic exacerbated community college students’ mental health needs and left two-year colleges with fewer resources to address those needs, according to a report by Chris Geary, a senior policy analyst for New America’s Center on Education and Labor. “Given the connection between mental health and academic success in college, improving students’ mental health will likely improve their academic, and future economic, outcomes.”

Degree Completion

Nearly one in 10 students who received a degree audit through a project led by the Institute for Higher Education Policy had already met the requirements for an associate or bachelor’s degree, but the degree was never conferred. A new report from IHEP describes barriers to student re-enrollment, persistence, and completion, while also outlining strategies to best support returning students.

Great Renegotiation

The U.S. labor market got even tighter in March, with both the number of job openings (11.5M) and workers who quit jobs (4.5M) hitting their highest ever recorded levels, according to the latest from the U.S. Bureau of Labor Statistics. Wages rose 4.7 percent over the past year, The Washington Post reported, but have not kept pace with inflation, which grew 8.5 percent during the same period.

Rising Pay

Wages are increasing in the skilled trades, as robotics and artificial intelligence further integrate into those fields, writes Kate McElligott, senior future of work practice lead for the Autodesk Foundation, which recently created scholarships to support students entering construction trades. McElligott notes that the average earnings of U.S. construction workers reached $32 per hour in 2021.

Beyond Silos

For regional partnerships across higher education, K12, and industry to function well, they must get beyond time-bound, transactional relationships, according to a new report from the Education Design Lab. But too few do. So, the lab and the team of 11 higher education leaders it worked with describe a process for changing that. They also provide a tool leaders can use to assess the current state of regional partnerships.

Professional Certificates

Google will give U.S. businesses up to 500 scholarships (worth a total of $100K) for its career certificates, which do not require a degree or experience and can be completed within three to six months. Google also added a fifth certificate, in digital marketing and e-commerce, which was endorsed by two advertising groups. Its other certificates are in data analytics, IT support, project management, and UX design.

I’ll write soon on ideas for protecting students and taxpayers if Pell Grants are opened up to short-term programs. Send thoughts my way? Thanks for reading. —@paulfain