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 AACC Statement on Nexus/AIR Report, What’s the Value of an Associate’s Degree? 

10/2/2013

The Nexus/AIR report, What's the Value of An Associate's Degree?, asks important questions that community college officials and policymakers themselves have long posed. Unfortunately, the report's answers are deeply compromised by its basic assumptions. The report is especially damaging and misleading in asserting that there is a negative return on the public’s investment in community colleges—a finding contradicted by many other studies.
 
The study’s fundamental shortcoming is that, among the three most prominent measures of community college student success—the attainment of a certificate or degree, or transfer to another institution—the study excludes both certificates and transfers. This is compounded by excluding all those students who attain their associate degrees in more than 3 years. Without these data, it is not possible to meaningfully portray either the value added by community college programs or the public’s return on investment. The report’s authors acknowledge these basic data omissions up front, but then draw conclusions without taking these important factors into account.

The number of certificates awarded annually by community colleges is increasing dramatically, from 124,500 to 425,000 over the past 20 years.1 A variety of studies, including those by one of the report’s authors, show that these credentials often yield earnings returns that exceed those provided to  those who attain the associate or baccalaureate degree, particularly in the first years after college completion.
 
Neglecting the impact of community colleges in preparing students for transfer is a shortcoming equal to that of ignoring certificate attainment. While the exact percentage of transfers at the national level is not known, the National Student Clearinghouse has reported that 14.4% of all full-time community college students receive a degree within 6 years from another institution. Community college students complete degrees at the same rate as native 4-year students and generate the higher earnings correlated with those degrees. In fact, 28% of all baccalaureate recipients began at a community college and 48% have taken at least one course at a community college.2

To put this in perspective, the 150% normal time completion rate for IPEDS (the data source primarily relied upon for this study’s analysis of community college attainment), which includes the certificate recipients that the study omits, is 22%.3 Alternatively, more comprehensive data from the National Student Loan Clearinghouse show that 52.3% of all full-time community college students obtain a degree or certificate from an institution of higher education within 6 years.4 These data provide some context for the extremely partial view of overall community college success treated by the study.

AACC has other fundamental concerns with the report’s methodology. These include not accounting for the significant amount of state and local support provided to community colleges to train and retrain the local workforce, which drives up the calculated average cost per completion; the treatment of capital costs; and the assumption that publicly provided funding should be considered “tax revenue forgone.”

Despite its shortcomings, the report’s analysis of linking associate degree attainment to PayScale data provides some interesting insights deserving of further inquiry. The study found a positive relationship between appropriations per FTE and higher earnings, and also found that higher faculty-student ratios were associated with enhanced graduate earnings. Institutions with relatively high percentages of Asian American and Black students report higher starting salaries (particularly the former).

The data limitations that compromise the present study need to be resolved as quickly as possible, so that studies of this nature can lead to more reliable conclusions. In its Higher Education Act reauthorization proposals, AACC continues to urge the creation of a national data system to track all postsecondary students throughout their increasingly complex educational pathways. AACC also advocates generating earnings/income information for all postsecondary completers, by using Social Security earnings records. The Obama administration reportedly is contemplating using this information for the College Scorecard, and we strongly encourage that action. If these earnings data were available, some of the most significant flaws in the report could eventually be addressed. 

 

1. Mullin, C.M. (2011, October). The road ahead: A look at trends in the educational attainment of community college students (Policy Brief 2011-04PBL). Washington, DC: American Association of Community Colleges.

2. Mullin, C.M., & Phillippe, K. (2013, January). Community college contributions (Policy Brief 2013-01PB). Washington, DC: American Association of Community Colleges.

3. Knapp, L.G., Kelly-Reid, J.E., and Ginder, S.A. (2012). Enrollment in postsecondary institutions, Fall 2010; Financial statistics, Fiscal Year 2010; and Graduation rates, selected cohorts, 2002-07 (NCES 2012-280). U.S. Department of Education. Washington, DC: National Center for Education Statistics. Retrieved 10/1/13 from http://nces.ed.gov/pubsearch

4. Shapiro, Doug, & Dundar, Afet (2012, January). Completing college: A national view of student attainment rates. Herndon, VA:  National Student Clearinghouse Research Center.

Contact: David Baime
202.416.4500
dbaime@aacc.nche.edu

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