College is a riskier investment for some students

Short programs can bump students' wages on their way to a degree

College's return on investment for high-risk or underserved students is not always a sure thing—especially when they attend a school without supportive programs—but a pair of recent studies shows that shorter, certificate-awarding programs can help.

"A college degree is more of a stepping stone, one ingredient to consider when you're cooking up your career.... it's not always the best investment for everyone," says one study's co-author Alan Benson, an assistant business professor at the University of Minnesota.

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His paper analyzes the value of California's higher education. Using Census Bureau data, Benson found a gap in the monetary return between attending the school in the University of California (UC) system versus the California State University (CSU) system. The more prestigious UC spends two times as much per student as CSU does.

Researchers found the trend to be persistent nationwide. Due to resource issues at second-tier schools, graduation rates and time-to-degree made attending college a riskier investment.

For example, in the UC system 80% of freshmen earn a diploma within six years.  They also on average earn 10% more than USC alumni.

For the average student, college is still a smart investment, but some, especially males at non-elite schools, face a ROI that "can reasonably inspire caution among student[s] and their parents."

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Despite record-high college enrollment, the graduation rate has remained low. Less than 60% of first-time, full-time college students graduate within six years, according to the Institute of Education Sciences, and that rate is even lower for older, low-income, minority, and part-time students.

Longer completion times mean students incur more debt. Data from Temple University and University of Texas-Austin show those two additional years raise students' debts by almost 70%.

Another report from the William T. Grant Foundation examines alternatives to the traditional four-year, full-time college plan. The study found some students benefit from a slightly different academic plan that builds in short-term credentials along the way to their degree.

"If you feel you’re at risk of having your college career interrupted, it may be a smart to plan to get a short-term credential on the way," says author James Rosenbaum, chair of Northwestern University's Institute for Policy Research program on poverty, race, and inequality.

Rosenbaum found 46% of community college students have no credentials even eight years after high school graduation, despite finding that certificates result in higher wages on average. According to the report, compared with on-time high school graduates:

  • Bachelor's degrees holders earned 34% more;
  • Associate degree recipients earned 22% more;
  • Certificate recipients earned 13% more; and
  • Students finishing "some college" earned 3% less.

That "some college" population would benefit from shorter-term credentials, such as a one-year certificate required for surgical assistants, argues Rosenbaum.

"One-year certification and you’re saving people’s lives," he says, adding, "those are vital jobs."

Schools need to be better at outreach and marketing to make students aware of these faster credentials, says Rosenbaum. Specifically, he recommends more coordination between two- and four-year colleges to offer more certificates and additional investment in college counseling (Paquette, Washington Post, 1/30; Abdul-Alim, Diverse, 2/1).

The takeaway: Shorter certificate-awarding programs improves high risk students' return on investment for college.

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