New research finds a big mismatch between the certificates that pay off and the ones students earn

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A new analysis of federal data finds a substantial mismatch between the certificate programs that have the greatest financial return on investment, and the ones in which most students enroll.

The analysis was done by Michael Itzkowitz, senior fellow at Third Way and former director of the College Scorecard, who has been working for years to expand the country’s knowledge base around the financial payoff of both sub-degree and degree programs.

His new research looks at the earnings premium of graduates—and how long it takes them to earn back what they spend on college — for 40,000 different bachelor’s, associate, and certificate programs that had to report publicly available data to the U.S. Department of Education. The data cover 2.2 million graduates in 2017-18. (Data were not available for very small programs, or for students who enrolled but didn’t complete.)

The analysis found that certificate programs were more likely to produce a short-term ROI than were bachelor’s programs, which typically cost more in time and money—but they were less likely than associate programs to do so. All told, only 48 percent of certificate programs pay for themselves in additional earnings within five years.

“People enroll in certificate programs with the assumption that they will be adequately trained and prepared to succeed in the workforce immediately,” Itzkowitz said. “These new data show that while some offer that opportunity to their students, over half of them fail to deliver on that promise, leaving them with no economic return on the investment for the preparation they paid for.”

In fact, only 34 percent of certificate completers actually saw a short-term ROI. In other words, students earning certificates disproportionately are attending the half of programs that don’t provide a quick return. And more than half of certificate completers will never recoup their costs, according to the analysis.

That variance has to do with both individual program quality and field of study. Fields that had both relatively large enrollments and delivered the strongest five-year ROI included transportation and materials moving, industrial equipment maintenance, and practical nursing.

The analysis also found wide variance among programs, such as those in allied health, that are often lumped together in the everyday vernacular. For example, nine in 10 programs for allied health diagnostic, intervention, and treatment professions provide a return within five years. But those programs graduated just shy of 8,000 students in 2017-18. In the much larger field of allied health and medical assisting services, with almost 70,000 graduates, more than half of programs provided no ROI at all.

The kicker:

“Related programs can have drastically different outcomes, even when awarded at the same credential level,” Itzkowitz wrote.

The full methodology and other findings from the analysis can be found here.

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Open Tabs

Federal Policy

The U.S. Departments of Education and Labor are encouraging colleges and state workforce agencies to help unemployment insurance beneficiaries access federal financial aid, including Pell Grants. The Education Department also created a new site for states to share with UI recipients to help them find college training programs that are eligible under the Workforce Innovation and Opportunity (WIOA) Act.

“Doubling Pell is only reasonable as part of a coherent, sensible approach to addressing concerns about cost and personal responsibility in higher education—not as part of an eclectic grab-bag of giveaways and bad ideas,” argue Beth Akers, a senior fellow at the American Enterprise Institute, and Frederick Hess, a senior fellow and director of educational policy studies at AEI, in an essay for The Hechinger Report.

California Policy

Californians who have been laid off during the pandemic soon will be eligible for up to $2,500 in state grant aid for college or job training, reports Jeong Park of The Sacramento Bee. The California Student Aid Commission will use $500 million in federal relief funds for the grants, which should be available for the spring semester. At least half the funds will go to parents with children under 18.

Short-Term Credentials

The Presidents Forum and JFF are hosting a webinar next week on short-term credentials and how they fit in the broader ecosystem. Speakers include Sue Ellspermann, president of Ivy Tech Community College, Joe May, chancellor or Dallas College, and Camara Wilson, who earned a short-term credential at Ivy Tech. (I’m moderating.)

Learning and Employment Records

“Millions of employers will change their hiring, retention, and promotion practices” as the U.S. transitions to the use of learning and employment records (LERs), Isabel Cardenas-Navia, senior director of research at Workcred, and Shalin Jyotishi, a senior policy analyst at the Center on Education and Labor at New America, wrote in Issues in Science and Technology. The shift will alter the importance of degree and nondegree credentials and their relationship to each other.

Working Learners

More than 300,000 people in greater San Antonio hold some college credits but no degree, said Robert Vela, president of San Antonio College, during a JFF podcast episode (which I hosted) on how policy makers can help community colleges better serve adult students. “How do we get you back, get you graduated, but in turn have a funding model that incentivizes bringing those students back?” Vela said.

Career Preparation

Faculty members were more likely to say that articulating the value of the liberal arts in career preparation is a significant challenge for their institution (34 percent) than were college administrators (about 22 percent), according to the results of a national survey conducted in fall 2020 by the Association of American Colleges and Universities. Financial constraints were the top-cited concern.

Changing Careers

Roughly one in three U.S. workers under 40 have thought about changing their occupation or field of work since the pandemic began, according to a July poll conducted by The Washington Post and the Schar School of Policy and Government at George Mason University. Many respondents said the crisis heightened their realization that life is short and now is the time to make changes.

Blurred Boundaries

SUNY Orange and SUNY Empire State College have created a transfer pathway that gives registered nurses a direct path to an online bachelor’s degree, reported the Mid Hudson News. Interested SUNY Orange nursing grads can automatically enroll at Empire State, which will waive application fees and allow the transfer of 63 credits toward the four-year degree.

Arbitrary boundaries between high school and community college are beginning to blur and could point to a new way forward, writes Joel Vargas, vice president of programs at JFF. He describes a “model that is neither high school nor community college but a combination of the two that saves students time and money, while offering them new kinds of guided support and preparation for careers.”

A version of this content was originally published in The Job newsletter. Sign up for the newsletter here.

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