Associate’s Degrees—The Next Big Thing?

Associate’s degrees may be the next big thing. Already, they are the nation’s second most commonly granted degree after the bachelor’s—and the number of associate’s degrees granted is increasing faster than the number of bachelor’s degrees awarded.  Many students who don’t have the money, time or inclination to pursue a bachelor’s degree are looking at the associate’s degree as a way into the labor market. And, if they make good choices about where to go and what to study, their decision may prove wise. If they don’t, the associate’s degree may be their next big disappointment.

The value of an associate’s degree and the importance of shopping around is made clear in a new report on the wages of students in Tennessee who completed their associate’s degrees either one or five years ago.

Drawing from that report, the table below highlights some of the most important data patterns in the Tennessee wage data. They show the median wages of graduates from one or five years out of associate’s degree programs across the state. First year earnings are shown (increasing from the lowest to the highest) and next to them are the median earnings of graduates five years after finishing. Entries marked in red are below the state wide benchmark. The very last line of the table displays the median wage for bachelor’s degree recipients.

The patterns in Tennessee aren’t very different from those found in other states that College Measures has studied.

Here are four key findings:

  1. Overall, programs whose graduates have low first-year earnings are still lagging five years after graduation. In short, most students who start with low wages end with them.
  2. Some of the programs where graduates are lagging aren’t the ones you’d expect–Management and Information Systems, for instance.
  3. The programs turning out the highest paid graduates are either teaching students how to fix things (e.g., Electrical Engineering Technical; Industrial Production Technician) or how to fix people (e.g., Allied Health; Nursing).
  4. The average wage for associate’s graduates after 5 years is virtually the same as the median household income of all Tennesseans ($41,699 versus $41,693).

And one more thing: deciding whether to get an associate’s degree or a bachelor’s degree isn’t a no-brainer. Tennessee, as in almost every other College Measures’ state, first-year wages of associate’s degree graduates are higher than those of bachelor’s graduates but bachelor’s graduates see their earning grow faster than the wages of associate’s graduates. So, in year 1, associate’s graduates earn around $3,500 more than bachelor’s graduates but by the fifth year after graduation bachelor’s graduates on average are out earning associate’s graduates by a few hundred dollars. Even so, don’t forget that it took bachelor’s graduates several more years to earn that degree—and they lost wages while in school and paid tuition and other associated costs. Getting the bachelor’s degree is far more expensive than getting an associate’s degree.

Averages hide interesting patterns. One is that graduates from high paying technical associate’s programs earn more than the average bachelor’s graduate: some $13,000 for nursing and $20,000 for electrical engineering technicians. Graduates with other associate’s degrees, such as Human Development, Family Studies, fall further behind as time goes by.

These data suggest that students should choose carefully among their postsecondary education options. And in Tennessee doing so just got easier: the report was released in tandem with a new website that lets people explore the wages graduates from almost every program offered by public institutions in the state. The site, EduTrendsTN,  was developed by College Measures in partnership with the Tennessee Higher Education Commission (THEC) and the Tennessee Department of Labor and Workforce Development

Clearly, students should pursue education and careers that meet their skills and interests—the squeamish should avoid nursing no matter how well it pays. But students are entitled to know how they are likely to fare in the labor market after they earn a degree. And for students who, for whatever reasons, decide not to pursue a bachelor’s degree, the evidence about the payoff for technical associate’s degrees should be reassuring.

Graphic: Associate's degree earnings

Read more in the Tennessee Public Postsecondary Graduates and the Labor Market.