College Degree Loses Value

No longer is the traditional four-year college experience vital to ensure a successful life for graduates, at least in Texas.

According to a College Matters report entitled Higher Education Pays: The Initial Earnings of Graduates of Texas Public Colleges and Universities, “the median first-year earnings of graduates with technical associate’s degrees is more than 11,000 dollars higher than bachelor’s degree graduates.”

The report, written by Mark Schneider, president of College Matters, documents the first-year earnings of recent graduates from two and four-year public institutions in Texas. This information came from students who completed undergraduate or graduate degrees from Texas institutions between the years of 2006 to 2010.

“The goal is to better inform prospective students, policy makers, and those who lead institutions of higher learning about the labor market success of graduates from different institutions and different programs across the state,” Schneider explained.

Today, the bachelor’s degree is the most commonly earned degree in the United States. Historically, a bachelor’s degree paved the way to a concrete salary and secure life. In fact, the Bureau of Labor Statistics states that “bachelor’s degree holders nationwide earn on average about 65 percent per year more than high school graduates, and bachelor’s degree holders are far less likely to be unemployed.”

However, a technical degree now appears to have more value than the traditional bachelor’s degree. In comparison to students who complete academically oriented two year degrees, technical two year degree graduates earn an average $30,000 more.

Schneider believes that “technical-oriented associate’s degree programs in the state of Texas are helping many students successfully enter the labor market by equipping them with skills that are in demand.”

As the number of students studying science, technology, engineering, and mathematics (STEM) continues to rise, statistics reveal which of these fields guarantee the most success. Surprisingly, those with a biology degree at both the bachelor’s and the master’s level earn below the statewide median. In comparison, there was a “premium for bachelor’s graduates in mathematics, who out-earn biology graduates by more than $20,000 statewide and all bachelor’s graduates by more than $9,000.”

Graduates who majored in nursing, the top-paying program, earn almost three times more than students who majored in biology, the bottom paying program. In fact, “out of the 10 most popular undergraduate majors, biology graduates who enter the labor market lag behind all other graduates.”

Business and accounting stand out as two of the most prosperous areas of study. Schneider states that “of the six programs where graduates earn more than the state median, four are business-related, and graduates with accounting degrees earn the most.”  Researchers are currently investigating whether the trends hold up five to ten years after graduation.

The research also found fascinating information about the value of a master’s degree. According to Schneider, “master’s degree graduates earn more—often far more—than students with a bachelor’s degree.” In Texas, the median first-year earnings of master’s graduates are $63,340—over  $24,000 higher than the median first-year earnings of bachelor’s graduates.

The ultimate purpose of the research was to show that it does not only matter what students study, but where they study. Research shows that graduates with the same degree earn varying amounts based on where they attend school.

It is to be noted that the data reported reflects short term labor market results. Looking ahead, “graduates with bachelor’s degrees tend to increase their earnings faster than those with associate’s degrees, so that the large differences we document here may erode over time.”

 

Ali Swee is an intern at the American Journalism Center, a training program run jointly by Accuracy in Academia and its sister organization— Accuracy in Media.
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