Are Community Colleges Really a Better Bet Than Harvard?

A recent study reports that in Texas, "On average, a year after graduation, students with two-year technical degrees have first-year median earnings of more than $50,000, just over $11,000 more than graduates of bachelor's degree programs across the state." The findings from College Measures, a partnership between American Institutes for Research and Matrix Knowledge Group, list that other states repeat similar patterns, with earnings of those with technical degrees coming in extremely comparable if not beating those with bachelor's degrees, even with a shorter program duration.

What should we tell soon-to-be high school graduates to do now? Even with this new data, the answer remains complex.

College Measures findings
An essay from higher-education expert Jeffrey Selingo published in The Wall Street Journal summarized many of College Measures findings:

In Tennessee, the average first-year salaries of graduates with a two-year degree are $1,000 higher than those with a bachelor's degree. Technical degree holders from the state's community colleges often earn more their first year out than those who studied the same field at a four-year university. ...

In Virginia, graduates with technical degrees from community colleges make $20,000 more in the first year after college than do graduates in several fields who get bachelor's degrees.

While eye-opening, College Measures has limited data to study. This data includes only first-year wage information from students who remained in-state to work. It leaves out potential future earnings of higher degrees in subsequent years, as well as earnings from those who left the state to take a job. Comparing the earnings of a technical school graduate with a four-year art history degree also can skew the data in favor of an associate's degree. College Measures data does reinforce the significance for earnings from highly employable degrees.

Unemployment
Those who are unemployed are not factored into College Measures wage data. But College Measures does include the percentage of graduates whom they have wage information on for each college. To take one example from the Wall Street Journal article, while Dyerson State Community College graduates earn $5,300 more in their first year after completion compared with those from the University of Tennessee at Knoxville, the data has wage information for only 43% of Dyerson graduates with an associate's degree and 29% of Tennessee graduates.

So those wondering what path to take after high school must also look at the chances of snagging a job. There's an obvious benefit for any higher education after high school, but the biggest jump in improved chances of employment comes with a bachelor's degree:

While some two-year programs could offer a higher wage, four-year programs offer the largest advantage in finding work.

Debt
Another factor to take into account is weighing the extra two years of college costs versus an extra two years of wages. According to College Reality Check, the net price for a bachelor's degree at Bridgepoint Education's (NYSE: BPI  ) Ashford University is about $17,300, only about $1,000 less than the cost of Harvard. An Ashford graduate can expect to earn $36,400 annually in his or her early career, about $14,000 less than a Harvard grad.

While Harvard's earning power can make up for the extra years of paying tuition, it's obviously not a school for everyone, with its difficulty of admission. When comparing Ashford with Western Iowa Tech Community College, with an associate's degree costing about $5,100 yet with a graduate expecting to earn $32,200, the cheaper cost of a degree with a few extra years of slightly lower earnings can create a difficult choice.

School Net Price Average Income (Early in Career) Graduation Rate
Ashford University $17,292 $36,400 13.2%
Western Iowa Tech $5,085 $32,200 16.1% (in 2 years)
Harvard University $18,277 $50,000 86.8%

Source: College Reality Check.

In addition, graduation rates should also be reviewed. College Reality Check reports that only 13.2% of Ashford University students graduate in four years. Only 16% of Western Iowa Tech students graduate in two years. Many for-profit colleges, such as Ashford, have similar graduation rates below the national average. At Apollo Group's (NASDAQ: APOL  ) University of Phoenix, at its Phoenix campus, only 2.6% of students graduated within four years, according to information gathered by the Chronicle of Higher Education. In the University of Phoenix's online program, just 0.7% graduated within four years.

Weighing the factors
College Measures' findings demonstrate that with college costs at all-time highs, a true cost-benefit analysis needs to be done on a high school graduate's options. The right four-year college, such as Harvard, can offer a superb education with little debt and employment even with an art history major, whereas the wrong one can leave you without a degree but saddled with loan payments.

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Read/Post Comments (8) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 11, 2013, at 4:25 PM, jman6366 wrote:

    This is a stupid article!!! Geniuses go to Harvard and Ivy league schools to invent billion dollar companies and run for president... There really is no comparison!!!

  • Report this Comment On May 11, 2013, at 4:43 PM, blackjac5000 wrote:

    Plot Holes abound with this:

    1) Citing Texas, whose economy is largely built around oil extraction and opening new WalMarts, as the hard evidence. Further, the guys running the oil companies very likely attended Harvard B-school.

    2) Harvard Extension School is analogous to a community college, getting you a Harvard degree on a community college schedule and price tag: http://www.extension.harvard.edu/

  • Report this Comment On May 11, 2013, at 5:16 PM, DrJCA1 wrote:

    Two year degrees actually prepare kids to do something. Many four year degrees prepare kids to do nothing. Community colleges often are a much smarter (and cheaper) choice.

  • Report this Comment On May 11, 2013, at 5:31 PM, creativenough wrote:

    Just like everything else its not about whether a community college is better than an ivy league college. It's relative. You have to do your own research. As a student that has attended CUNY at Laguardia Community College in Long Island City, New York in the borough of Queens. Specifically regarding the Registered Nursing Department. Its not better. In my experience and many other registered nursing students would agree, its definitely one of the worst. Many of the nursing professors have their own agenda and do not care about the students. In 2010 New York State in Albany offered La Guardia Community College's Nursing Dept a $300,000.00 to enhance it's department's facilities with things such as mannequins that simulate births(cool idea no one had a problem with that). What myself and the other nursing students who were in the registered nursing program had a problem with was the "trickle down effect" i caused. The Deputy chair along with the rest of the nursing professors decided to use filtering tests to weed out the students. Students that were already in their clinical rotations and had 2 clinical rotations left before graduation. The two classes that were left for us before graduation was Med Surg II and Pediatrics. The tests questions that the faculty used to "filter" nursing students out, were not from an approved test bank or any affiliated testing preparedness companies such as "Kaplan" for example. The professors came up with question stems and answers that were not in line with any state or federal guidelines. In the end, out of what was supposed to be a graduating class of 68-70 students, the nursing professors failed 44 students and kicked many students completely out of the program. So what people have to take into consideration when choosing a college that depends on government funding to operate is what will be the cost to the students in order for the college to get that funding and for faculty to get their, in some cases, six figure salary. So just remember, and take it from someone who is left owing 50k in students loans and has no degree, however never failed the class that was two classes before graduation. MONEY is always the bottom line, and it doesn't matter if its public, private, or Ivy League. At least Ivy league colleges place the cards on table. They charge the student and the student receives and education. A community college will exploit students in whatever way fits their bill. They just want money so they can keep drawing their salary. They could careless about the students. I am not saying this about all community colleges, professors, or college departments. But I think the public should beware of this article. Do your own research. Use your brain and think. Good Luck, and I hope you never find yourself in mine and 44+ students situation who attended La Guardia Community College(Nursing dept.) CUNY in Queens.

  • Report this Comment On May 11, 2013, at 7:22 PM, Imani1962 wrote:

    It really depends on what your major is as to what is the best route is to take. Community colleges tend to focus on those skills that you can use right out of college. Four year colleges will focus the first two years on a liberal arts curriculum, and the last two years on your major. I know someone who has spent a considerable amount of time in school. She got her bachelors degree in psychology and graduated with honors. She could not find employment and has to now go back to graduate school. I graduated from a two year community college registered nurse program and was offered 72,000 per year to work at a long term care facility. If I had gotten a hospital job the salary would have been higher. The only problem with nursing today is that most places prefer those with a bachelor of science in nursing. And the pay differential and type of work is not that different. You can work with an associate but it would be prudent to get a BSN degree.

  • Report this Comment On May 11, 2013, at 11:16 PM, ACohen29 wrote:

    I think Community Colleges provide a great education at a very affordable cost. I feel that community colleges provide higher education and vocational to people who otherwise might not be able to get an education due to higher costs of 4 year schools. I feel that community colleges are a great place to start your college career. I feel that they offer many majors and programs that are just as good if not better than many 4 year college programs. I feel they are also a great place to go who are changing careers or need to upgrade there employment skills. In addition, after getting your associates, you can move onto to get your bachelors degree. Community Colleges in most states have matriculation agreements with 4 year state universities and other institutions of higher education. Community Colleges provide a quality affordable education to the average person. They are truly great institutions of higher learning.

  • Report this Comment On May 13, 2013, at 1:01 PM, Labbits wrote:

    Be careful of taking the graduation rates cited as an accurate portrayal for community colleges and many for-profit colleges. "Graduation data from the National Center for Education Statistics’ Integrated Postsecondary Education System is limited to tracking completions for groups of first-time, full-time degree-seeking students at the undergraduate level." Its well known that many CC students are not first-time or full-time students, and the same can be said for the for-profits. This seems misleading at best.

  • Report this Comment On May 15, 2013, at 9:19 AM, rsinj wrote:

    "Average Income (Early in Career)" is not a good metric for use in this exercise of playing with numbers.

    What should be more important is "Average Income (Peak Earning Years)".

    Further, how many Ashford (or any 2 year/community college) grads do we know who are corporate officers? Hold federal government offices? Make the Forbes list of wealthiest individuals?

    Obviously Harvard and the Ivy league schools are not for everyone regardless of the price. However, to give the slightest impression that this article is an apples-to-apples comparison is "foolish".

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