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ED Data Show Earnings Differ Among Career College Programs

Tuesday, December 6, 2016  
Posted by: Bill DeBaun, Director of Data and Evaluation
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The U.S. Department of Education (ED) under President Barack Obama’s administration has worked hard to increase the amount of postsecondary information available to consumers like students and their parents. Earlier this month, ED released a new data set that will surely be of interest to members: program-level gainful employment earnings from graduates of career colleges. Career colleges, BigFuture notes, are “accredited institutions [that] prepare students for specific skill-based careers.”

The data set is a rich source of information that NCAN members can use to help make clearer to students what they can expect to earn after obtaining degrees at various levels from public, private non-profit, and private for-profit career colleges across the country. The data examine programs that had at least 10 students matched to Social Security Administration earnings data in calendar year 2014. These graduates would have been enrolled between 2008 and 2012. Members can find an Excel file with city and state information linked to the data, as well as a Pivot Table that allows for filtering on state, institution name and type, credential level, and academic program name.

ED’s analyses of the data set found that “some institutions are clearly paying off for graduates, offering a high-value degree relative to other institutions. In particular, programs offered by community colleges outperform comparable for-profit programs.” Recipients of certificates from public undergraduate programs earned almost $9,000 more in 2014 than those obtaining degrees from for-profit programs.

These higher earnings were found “both in relative terms and in absolute terms at the certificate level,” according to an accompanying fact sheet. Comparing common fields between public and for-profit institutions (which represented about 95 percent of all career college graduates), public institutions graduated about 75 percent of all students but also delivered higher earnings to graduates about 80 percent of the time. Notably, “among undergraduate certificate programs of the same field of study, the average difference is about $2,700, or about 13 percent, higher for public-sector programs than for those in the for-profit sector.”

It's difficult to make direct comparisons of these career college data to the bachelor’s and associate’s data in ED's College Scorecard. The Scorecard does include earnings outcome data from students in two- and four-year programs, but these are median earnings of financial aid recipients 10 years after they entered a school, regardless of whether they completed. The career college data represent median and mean (average) earnings of students two to six years after completing a credential. Still, as long as direct comparisons aren’t made, members can use both sets of data to give students a better understanding of approximations of their eventual earnings.

It will come as little to no surprise to NCAN members that all certificates are not created equal. “There are significant differences in earnings across program types,” ED’s fact sheet on the gainful employment data notes. Part of the aforementioned earnings differential stems from the fact that graduates from public sector institutions in the data set were “relatively more likely to have attended programs of study that yield higher earnings, such as licensed practical nursing programs,” and relatively less likely to have attended programs with lower earnings on average. Fewer than 20 percent of graduates from for-profit institutions were enrolled in “high-earning” fields. 

The analysis also considers the broader workforce implications of these gainful employment data. A full-time minimum-wage worker earns $14,500 a year. In 2014, 86 percent graduates of undergraduate certificate programs in the public sector earned more than $14,500, while 68 percent of for-profit graduates did. The release does note that students who earned higher-level degrees (e.g., associate’s, bachelor’s, etc.) earned more than $14,500 at increasing numbers, which is to be expected. 

“Every hardworking student in America deserves a real opportunity to earn an affordable, high-quality degree or credential that offers a clear path to economic security and success,” says the ED fact sheet accompanying the data release. Concurring with this, The Institute for College Access and Success (TICAS), noted in a statement that, “The data show huge variation in earnings among programs at the same school and for the same program offered at different schools. This underscores that it matters tremendously where students go for career education and what they study.”

NCAN agrees with both sentiments, and these newly released data will help members point students toward academic programs that are more likely to yield better outcomes.