Although studies have shown that having a bachelor's degree can significantly increase a person's lifelong earnings, holding a four-year degree does not immediately guarantee a higher salary. A new report shows that in the first year out of college, graduates of two-year community and technical colleges often have higher earnings than those with a four-year degree.
In a report released on Tuesday, the nonprofit organization College Measures examined the first-year earnings of graduates with different majors and degrees from two-year and four-year colleges in five states: Arkansas, Colorado, Tennessee, Texas and Virginia.
The report argues that too few students have information about their potential earnings before deciding what type of school to attend and what major and degree to pursue. That lack of information can lead students to take out a high amount of loans to pay for a degree that might not give them the salaries they need to pay off their debt, the report says.
"Prospective students need sound information about where their educational choices are likely to lead," the report says. "This information can save students money, keep them from making bad choices, and prevent a lot of future financial headaches."
The report found that some short-term credentials, such as associate's degrees or certificates from technical colleges, are just as valuable, if not more valuable than bachelor's degrees.
In Arkansas, graduates with an associate's degree earned just $1,354 less in the first year out of college than those with a bachelor's degree. But in Tennessee, graduates with associate's degrees out-earned bachelor's degree holders by nearly $1,400 in the first year after graduating.
And the difference was even greater for Colorado, Texas and Virginia graduates with technical- and career-oriented associate's degrees. First-year earnings for these graduates were $2,000 higher in Virginia, $7,000 higher in Colorado and more than $11,000 higher in Texas.
The report also argues that, despite the push to encourage more students to pursue degrees in STEM fields (science, technology, engineering and mathematics), there is a disparity in pay, as some science majors often start out earning less than English majors, while graduates with degrees in technology, engineering and mathematics typically experience more success.
"Despite such rhetoric and clamoring, the labor market is far more discriminating in the kinds of degrees it rewards," the report says.
In Virginia and Texas, for example, biology is one of the most popular fields of study, but graduates with bachelor's degrees in that area have first-year earnings several thousand dollars below the state averages.
And even at higher educational levels, those with science-related degrees earn about the same as those with liberal arts degrees, and far less than those with other STEM degrees: In Texas, a graduate with a master's degree in biology earns only $1,000 more than someone with a master's degree in sociology, and nearly $40,000 less than a graduate with a master's degree in mechanical engineering.
"Prospective students who are bombarded by the rhetoric invoking the critical importance of STEM education might assume that majoring in any STEM field will lead to higher earnings," the report says. "Yet the objective earnings data show that in each state and at each level of postsecondary credential, graduates with degrees in Biology — the field with the largest number of science graduates — earn no more than graduates with degrees in Sociology or Psychology."