When Community College Is a Good Investment - And When It Isnít. | Beaufort County Now | Community college is often seen as a cheaper alternative to traditional four-year undergraduate degree programs, providing students with a widely-accessible means to pursue a postsecondary education without being burdened by tens of thousands of dollars (or more) in student loan debt.

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    Publisher's Note: This post appears here courtesy of The James G. Martin Center. The author of this post is Matthew Wilson.

    Community college is often seen as a cheaper alternative to traditional four-year undergraduate degree programs, providing students with a widely-accessible means to pursue a postsecondary education without being burdened by tens of thousands of dollars (or more) in student loan debt. But does that perception translate into reality―does community college always pay off? As is often true, the answer is in the data.

    Following up on his in-depth analysis of graduate degree programs, higher education researcher Preston Cooper crunched the numbers on community colleges. Using a similar methodology to his previous studies on graduate and undergraduate programs, Cooper sought to determine the financial yield of nearly 17,000 certificates and associate degrees offered by community colleges and other "sub-baccalaureate" programs. Here's what he found.

    For students who are able to complete their degrees on time, community colleges often provide a handsome return on investment (ROI). According to Cooper's study, the median associate degree boasts an ROI of $167,000 for on-time graduates―in other words, the difference between the increase in lifetime earnings graduates can expect as a result of their degree and the total investment required to obtain the degree is $167,000 for the median degree program. But when degrees are broken down by program of study and rates of completion, the story becomes a little bit murkier.

    The community college degree programs with the highest ROIs are generally concentrated within a few specific disciplines. Of the associate degree and certificate programs with ROIs above $1,000,000, more than fifty-five percent are in nursing or similar fields, and an additional nineteen percent are in healthcare-related subjects, such as certification programs for medical technicians.

    North Carolina's Carolinas College of Health Sciences, for instance, offers an associate degree in nursing with an ROI (adjusted for completion and costs) of $819,220, along with a professional certificate program for medical technicians with an adjusted ROI of more than $1.3 million. Other high-yield fields include mechanics, metalworking, and some skilled manual trades like vehicle maintenance and home repair work―for example, Cape Fear Community College graduates with an associate degree in precision metalworking can expect a median adjusted ROI of $136,494.

    Most liberal arts and humanities degrees, as well as many vocational training programs, are among the community college programs with the lowest financial yields. Although a few high-ROI programs defy this trend―Asheville Buncombe Technical Community College's certificate program in criminal justice and corrections, for instance, boasts an adjusted ROI of $454,791―exceptions don't make the rule. Some low performers in North Carolina include Gaston College's associate degree program in teacher education, which has a median adjusted ROI of -$161,032, and Alamance Community College's associate degree in design and applied arts, which has an ROI of -$195,892.

    Among all the low-performing degrees, however, one particular program of study stands out: cosmetology. According to the data, despite the median ROI of $115,000 for community college certificates, eighty-nine percent of certificate programs in cosmetology have negative ROIs. Cooper writes that cosmetology's status as a near-universally poor investment can be largely attributed to the high costs associated with cosmetology certificate programs―which are frequently operated by private, for-profit institutions and are priced at "over $10,000 on average"―along with the fact that "cosmetology graduates tend to earn thousands of dollars less than people with only a high school diploma."

    Community college can be a tremendous opportunity and the right choice for many people. But we must guard against the myth that it's always the correct option for would-be students.

    As Cooper notes in his study, "field of study is generally the most important factor" when it comes to predicting the financial yield of an associate degree or certificate program. But also key are rates of completion, which have outsized impacts on the net financial value produced by many programs. While eighty-one percent of community college degrees in liberal arts and English literature have negative ROIs, before adjustment for low completion rates, that number is just fifty-five percent. Similarly, the data also shows that after adjustment for completion rates, the median ROI of certificate programs is reduced by fifty-four percent―to $53,000 from $115,000.

    Clearly, not all community college degree programs are created equal. Some, particularly in highly technical and specialized fields, provide fantastic opportunities for students from less privileged backgrounds to pursue high-paying careers. Others, such as programs in more academically-oriented subjects or those with dangerously low completion rates, can be highly risky investments.

    Perhaps some financial risk is unavoidable―for instance, every state requires aspiring cosmetologists to obtain a license before practicing their profession, and licensing conditions often include having a degree or certificate in the field. Still, potential students should carefully discern whether enrolling in a community college program is right for them, making sure to take into account the likelihood that they'll actually complete the degree and their expected financial trajectory after graduation. No one wants to be in a situation where their chosen degree program and career path causes them to be worse off than if they had just joined the workforce after graduating from high school. In many cases, individuals considering community college ought to recognize that the opportunity costs and investments required to pursue the degree simply don't make sense for them, and that a more financially stable future might entail foregoing an unnecessary degree and entering the job market directly.

    Of course, this essay is predicated on the notion that the value of a community college degree is in the financial yield that it generates relative to the investment required to obtain it. That's certainly not true for everyone; indeed, many individuals desire to further their education for their own personal development or intellectual formation, with little care for whether doing so makes perfect financial sense. But most people don't have that luxury. Most people aren't able to disregard financial considerations when making hugely important career decisions, such as whether or not to sacrifice tens of thousands of dollars and two years of their working-age life to pursue a community college degree.

    Community college can be a tremendous opportunity and the right choice for many people. But we must guard against the myth that it's always the correct option for would-be students―in many cases, the investment required to obtain a community college education just won't pay off in the long run. Students ought to make the decision on whether or not to pursue a particular degree or certificate only after thoroughly weighing the track record of the program, the likelihood that they'll finish it, the investment required, and what a realistic post-graduation outlook might look like.

    Matthew Wilson is a student at Princeton University studying politics and a freelance writer. He primarily writes on topics related to religion, higher education, and politics, and his work has been featured in several national media outlets.
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