Certificate Programs vs. Bachelor's Degrees

A recent report presents a finding that may surprise prospective students: Community colleges and many certificate programs, not bachelor's degrees, have the highest return on investment 10 years after enrollment.

That fact doesn't surprise Victoria Denise Ojeda. As a faculty member teaching electrical trades at Central New Mexico Community College with a long and successful career in the field, she says the program teaches skills the workforce needs, including professionalism and integrity, while sparing students from loads of student loan debt.

Instead, stigma is one of the biggest hurdles her students have to overcome.

"We have to convince parents and convince academia that everything has a value and it takes tenacity – it's not like you're pounding a hammer all day. There's critical thinking skills, math, so many skills you need to walk on a job site," she says. "A lot of people think, 'I don't want my child to be a construction worker.' But the bulk of what our labor force does isn't necessarily with a Ph.D. or master's degree."

Though there's nothing stopping them from pursuing higher degrees down the road, which is encouraged, Ojeda tells students, "I want you to change the way people look at us."

A certificate program may take just one or two years to complete, and courses focus on one specific skill or set of skills. Bachelor's degrees typically require four years of study and may include requirements outside a declared major or specific area of study.

In the long term, workers holding a baccalaureate degree outperform those with associate degrees or certificates, the study from the Georgetown University Center on Education and the Workforce found. Yet for the first decade, the net economic gains of one-year or two-year certificate programs are stronger.

For students interested in higher education but unsure whether a traditional bachelor's degree is the right fit, experts say certificates and associate degrees may be good alternatives depending on the chosen field of study and available financial resources.

For example, the adult educational and vocational practical nursing certificate program at the Putnam/Northern Westchester Board of Cooperative Educational Services, a regional education agency in New York, gives students a net value of $431,000 after 10 years while the median debt incurred to complete the program is just $7,000, per the report.

Those numbers outpace even the most prestigious colleges. The net present value of a bachelor's degree from the Massachusetts Institute of Technology, for example, is $311,000 at the 10-year mark, and graduates take out more debt – the median debt at MIT is $15,346, according to Georgetown's CEW.

Arming prospective students with this information, says Anthony P. Carnevale, director of the CEW, is a step in "piercing the veil of higher education."

As more students ask themselves whether college is worth the cost and tuition prices continue to rise at traditional four-year colleges, ideas about the value of an elite education may begin to shift.

New data may help prospective college students place less emphasis on the institution itself when selecting a college and instead look at specific program offerings and outcomes.

"It's not MIT, it's the occupation you enter," Carnevale says, arguing that when it comes to future earnings, what will matter more than which college you attend is what field you study.

Certificates can help students break into high-paying fields without investing in a four-year degree that may not be the right fit and could lead to student debt, says Mary Clare Amselem, a policy analyst at The Heritage Foundation.

The economy is diverse, as are the needs of students, she says, so supporting certificate programs that are more customizable can help students avoid unnecessary student loan debt.

"Not all degree programs require four years," Amselem says. "We have this arbitrary four-year mark for these programs, and I don't know that it takes as long to educate a chemical engineer as it does to educate an economist. Maybe it does, but that's something we should be asking: Why should those vastly different career paths require the same amount of schooling?"

Michelle R. Weise, senior vice president for workforce strategies and chief innovation officer at the Strada Institute for the Future of Work, says alternative and more direct pathways from education to employment are in high demand among learners, but students should not forget the noneconomic benefits of higher education.

"If you think about education majors as an example, the financial ROI is not that high for many of the folks who go into education," she says, "but it doesn't mean they don't value that and they don't find that rewarding in different ways and that they wouldn't still pursue it anyways."

However, Amselem contends, there can be a balance between studying for the sake of learning and ensuring students get an adequate return on their college investment – all while protecting taxpayers.

"When we're talking about someone who's taking the biggest financial risk of their life going to college and we're talking about asking the American taxpayers to finance this, job placement and the success in the job market should be the priority, in terms of public policy," she says. "The shaping of the whole person can happen, but the question is whether the American taxpayer should pay for it."

Earnings after certificate programs can vary widely depending on field of study and other factors, Weise notes. Students who recently graduated from high school or are adult learners can use short-term programs and alternative pathways, though she notes adult learners face significant challenges navigating the current education system, particularly if the student is a parent or caregiver.

In the Georgetown CEW report, many of the certificate programs with the highest return on investment are in the nursing field. In quickly evolving industries like aerospace, Weise says a four-year degree may not be necessary, but no two industries or communities have the same needs, so the choice between a certificate program and a bachelor's degree can depend on those unique factors.

Certain certificate programs can allow students to earn more than someone who pursued a bachelor's degree in the same program, she says, so a four-year degree is not always the best option from an earnings perspective. This, she says, is especially true in certain certificate programs where students are taught to help people or fix things in high-need areas.

In general, however, a bachelor's degree leads to higher earnings overall.

"It totally depends on how old the learner is, what kind of resources they have to put toward it, but hands down, you can't argue that a college degree is not worth it," Weise says. "The earnings premium of a bachelor's degree is stronger than most programs."

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