Using recently published data from the U.S. Department of Education, Texas Public Policy Foundation’s Andrew Gillen provides a report intended to inform parents and policymakers about the earnings prospects for specific college degrees. The source of the data is the College Scorecard and as usual, that data is limited by the fact that the College Scorecard only reports earnings data for students who borrowed money through Federal Student Aid to attend college. The report focuses on earnings and does not report the cost to earn the degree, the median amount borrowed, or the estimated ROI.
Early in the report, Dr. Gillen provides the reader with a distribution of enrollment weighted earnings in sequential order of credentials and the time that it takes to earn the degree or certificate. In Table 1 below, you can see the progression.
There’s a slight anomaly between median earnings for those completing graduate certificates versus master’s degrees but otherwise, the numbers are not surprising.
In Figure 3 below, Gillen demonstrates the variability of earnings between degree programs within each major credential. Notably, there are some associates degree programs where the earnings exceed some bachelor’s programs and some bachelor’s programs where earnings exceed some master’s programs.
Table 2 of the report provides the median annual earnings three years after graduation by state and credential. There are several interesting observations from this data. First, the College Scorecard reports graduates’ earnings by the college they graduated from and not the state in which they work after graduation. Colleges with a high percentage of in-state students in low wage states are likely penalized by this methodology. Second, the gaps between credentials by state are not logically distributed. For example, the median earnings for associates degrees in Alabama and North Dakota exceed the median earnings for bachelor’s degrees in those states. Median earnings for associates’ graduates versus bachelor’s graduates in New Mexico are only separated by approximately $3,500 while the median earnings for master’s graduates in New Mexico exceeds bachelor’s by approximately $12,300. Rhode Island graduates’ median earnings by credential have a similar relationship to New Mexico’s yet they earn approximately $7,000 more per year for associates and bachelor’s graduates and $12,000 per year for master’s graduates.
Table 3 of the report provides an overview of college graduates annual earnings by control and credential. Gillen notes that bachelor’s degree recipients from public colleges earn less than graduates from the other types of colleges as do professional degree recipients from for-profit colleges. I don’t have a logical explanation for public college bachelor’s degree recipients having the lowest earnings among sectors, but if the majority of first professional degree programs are law, medicine, and education, it’s possible that the for-profit sector has a lower median since there are very few for-profit medical schools and almost no for-profit law schools.
The remainder of the report provides several figures illustrating graduate annual earnings by academic field and credential. Gillen notes that next to credential earned, the most important factor influencing median earnings is the academic field selected by the student. Appendix A provides a list of the earnings for the highest enrollment academic fields by credential.
Box plot figures for each of the credentials illustrate the variability in earnings for each field. Not surprisingly, STEM degree recipients generally earn more than non-STEM degrees regardless of credential. Included below is Figure 9 from the report, noting the differences in earnings by academic fields in bachelor’s degree programs as well as the variability between fields.
While Gillen’s conclusion notes that the data provided by the College Scorecard provides informative data about earnings for parents and students, like many, he fails to note the importance that the earnings data is only provided for graduates who borrow federal loans. It is obvious that students who need to borrow have fewer financial resources than those who don’t. What is not obvious is whether graduates who do not have to borrow earn more than those who do.
Since Dr. Gillen works for the Texas Public Policy Foundation, it’s not surprising that he and his team are following the lead of the Texas Higher Education Coordinating Board whose 60x30TX strategic plan calls for increased numbers of state residents with post high school certificates and college degrees who are able to earn enough money to repay their certificates and degrees. This paper reports earnings on a national level by degree program. A report that follows reports loan data as well and I will write about it separately.
