2-year degrees pay more in short term

9:34 AM, Sep 18, 2012   |    comments
  • Share
  • Print
  • - A A A +

By Walker Moskop | The Tennessean

A study of college graduates' earnings released today uncovered a surprising finding: A year after graduating from Tennessee's public colleges and universities, students receiving associate degrees tend to earn roughly $1,400 more than those who receive a four-year degree.

Nationally, bachelor's degree recipients tend to earn more during their lifetimes, and the study's authors emphasized that four-year degrees "remain an excellent investment for most students."

But at a time when the state is putting more emphasis on community colleges, the study's findings show that two-year degrees can provide an immediate return for graduates, particularly for those with degrees related to health care, engineering and technology.

First-year wages varied widely by college and area of study, but across all fields of study, recipients of associate degrees earned an average of $38,948, compared with $37,567 for those who received bachelor's degrees.

Matt Murray, a professor of economics at the University of Tennessee, said a plausible explanation for two-year students' higher earnings is that many of them are older than four-year college students, are likely to already be working and could be pursuing a degree as part of a job requirement.

One of those students is Nashville State Community College horticulture major Josiah Lockard, 30, who has been working in the landscaping industry for 14 years. He runs his own company and started taking classes at NSCC to learn landscape design.

"I wanted to diversify my skill set," Lockard said. He has one semester of classes left, after which he plans to transfer to Tennessee State University to pursue a degree in landscape architecture. While in school, he has no plans to cut back on work.

"Students with four-year degrees have very little job experience," Murray said. "Very little tenure in the labor market."

In addition, community college students pursuing trade and technically oriented degrees may see more of an immediate payoff than four-year degree students with a liberal arts-centered education. But over time, Murray said, earnings for bachelor's degree holders are likely to surpass that of associate degree recipients.

Richard Rhoda, executive director of the Tennessee Higher Education Commission, touted the study's data as a great source of information for students and employers. "Our biggest goal is to increase the educational attainment of adult Tennesseans," he said. Being able to provide salary data for specific programs advances that goal, he added.

'More information'

The study, which matched student records with state unemployment insurance data from 2006-10, resulted from a partnership among THEC, the state Department of Labor and Workforce Development and College Measures, a nonpartisan group that analyzes higher education data.

The report did not include students who earned postgraduate degrees or left the state after graduating. It also did not examine the long-term earning potential of degrees.

The report contains a wealth of information -- it has average salary information for dozens of degree and certificate programs at the state's nine public universities and 13 community colleges -- but it doesn't get around the challenge of measuring how much value a school or program adds to a student's experience.

Many outside variables, such as the economic conditions of the community surrounding a school and the type of student who applies, make it difficult to prove the extent to which the quality of a school or program is a driving factor behind higher or lower wages.

"Any data has to be taken with a grain of salt," Murray said. "But this will give potential students more information, which is better than less."

A few report highlights:

* Of those who received a bachelor's degree, graduates from the University of Memphis on average earned the most, $40,401. Graduates from the University of Tennessee at Chattanooga earned the least, $35,650.

* Health profession majors, such as nursing, received by far the highest average starting salaries, at $51,095, dwarfing the $29,616 earned by the average psychology major. Graduates receiving a health professions-related degree from Memphis or the University of Tennessee at Martin tended to earn more than those who received a similar degree from other universities.

* At two-year schools, Jackson State Community College graduates earned the most, $42,995. That was about $10,000 more than graduates of Pellissippi State Community College. Among all community college graduates, students from health and engineering-related fields had the highest first-year wages.

The study did not trace a relationship between what graduates studied and what careers they held, and its authors were careful to note that wages earned by graduates of any program are not the only performance measure for a program or school.

But they did conclude that the area of study has a clear effect on wages. "The bottom line: the choice of field matters."

"To borrow $100,000 when you're expected to make $20,000 is a bad bet," said Mark Schneider, president of College Measures. "To borrow $20,000 when you expect to make $60,000 is a totally different financial proposition. You should know before you go."

Most Watched Videos