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Many certificate programs don’t pay off, but colleges want to keep offering them anyway

Institutions are quietly resisting a proposal to strip federal funding from low-payoff programs

Vanessa Valenciano had high hopes for the certificate she earned at public Aims Community College in Colorado. After all, colleges have been advertising these kinds of credentials as the next best thing to a degree.

But when Valenciano tried to get a job in the subject that she’d studied — automotive upholstery — she couldn’t. There weren’t any near where she lived, and those farther away required work experience she didn’t have.

“Here in this area there’s really nothing, and I guess I didn’t realize that,” she said. The certificate that took her months to get and today costs about $2,000 has gone unused as Valenciano now tries to start her own business in another field.

Certificates are the fastest-growing kind of credential in higher education, touted as solutions for the growing number of people who want workforce training fast and don’t have time for a degree.

Some certificate programs pay off. On average, workers with certificates earn about 20 percent more than those with only a high school education, according to the Georgetown University Center on Education and the Workforce.

But new research from the nonprofit National Student Legal Defense Network and scholars at George Washington University shows that nearly two-thirds of undergraduate certificate programs left their students worse off than the typical high school graduate, making an average of less than $25,000 per year. The analysis used data from 2015, the latest available at the time, though more recent government statistics produce a similar conclusion.

And while most of those failing certificate programs are at for-profit colleges, which have long been criticized for leaving graduates with low earnings and sometimes extreme debt, nearly a quarter are at public colleges and universities.

Related: Momentum builds behind a way to lower the cost of college: A degree in three years

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The Department of Education has proposed regulations that would set a similar earnings threshold for career certificate programs in every sector, and for all degree programs at for-profits. Programs from which graduates earn less than the median salary for a working person with only a high school diploma in his or her state would lose access to federal financial aid. A certain high ratio of student loan debt to earnings would also trigger such a cutoff.

“The goal is not necessarily taking funds away and shutting down programs. It’s encouraging institutions to make better programs,” said Eddy Conroy, senior adviser in education policy at the left-leaning think tank New America. “If you come out of any program in higher education you should be able to make more than the average high school graduate.”

But public universities, community colleges and nonprofit colleges have now joined for-profit institutions in pushing back against the proposed regulations, which the Education Department is likely to formally introduce this summer with the goal of finalizing a rule by November 1.

Public and nonprofit colleges often leave students with less debt than their for-profit counterparts. But regulation advocates say that debt is not the only way to measure what students give up for a degree.

“Students still do spend time and money,” said Stephanie Cellini, professor of public policy and economics at George Washington University and co-author of the research analysis that found most undergraduate certificate programs don’t pay off. “They incur a cost, they’re out of the workforce.”

Meanwhile, many institutions operate certificate programs with paltry earnings.

Take one legal-secretary certificate, for example. The university’s website advertises that a legal secretary can make $29,534 to $48,910. The reality is that the program’s graduates earn a median of $18,495 three years later, according to the most recent Education Department data.

“We are proud of our graduates and their successes,” Thomas Schott, a spokesperson for the online arm of Purdue, wrote in an email. “The [data] does not reflect the individual circumstances that affect our graduates. For example, sometimes our graduates choose to work part-time to balance their personal obligations with the world of work.” He noted that all students have access to career services and all certificates can stack into associate and bachelor’s degrees.

Most low-payoff undergraduate certificates at public institutions are at community colleges. Graduates with a nursing assistant certificate at Triton College, a public community college in Illinois, for example, earn a median of about $18,000 per year. (Triton said the data on its students’ earnings was collected in 2014.)

“There seems to be a misperception a lot of the time that higher education is just a golden ticket,” said Preston Cooper, research fellow at the Foundation for Research on Equal Opportunity, who studies educational return on investment. “That turns out not to always be the case. There’s a lot of variation in quality and a lot of variation in the financial returns, both in the public sector and in the private for-profit sector.”

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According to a Hechinger Report analysis of the most recent Education Department data, which was released in March, 20 percent of public, 45 percent of nonprofit and 66 percent of for-profit undergraduate certificate programs with enough finishers to publish earnings data would fail the department’s proposed test of whether graduates make more than people with only high school diplomas.

Some disciplines would fare worse than others. Of the 653 cosmetology certificate programs with published earnings data, for example, 640 would fail that test.

Emmanual Guillory, director of student and institutional aid policy at the National Association of Independent Colleges and Universities, who represented nonprofit institutions in negotiations with the Department of Education, said he thought the earnings threshold could be a good idea, but that other concerns prompted him to vote against the regulations. For example, he said, the department did not propose a mechanism for institutions to appeal their data.

“I understand that the department’s trying to address the bad actors. I believe that they should be addressed,” said Guillory. “I just want to make sure that before any official action is taken, that we know for sure that the data is the most accurate data in order to make that action.”

The institutions also voiced concerns about the lack of time they had to consider new language for regulations. Other critics have argued that tying government funding to graduates’ earnings could incentivize institutions to enroll fewer students of color and first-generation students, as workplace discrimination and other factors can dampen their eventual earnings. Certificate programs that serve more underrepresented minority students have lower earnings, according to research by scholars at Vanderbilt University.

Ernest Ezeugo, higher education policy director at Young Invincibles, a nonprofit focused on issues that affect young adults, occupied the only seat at the negotiations meant to represent students.

“There’s something morally defunct about the idea that we wouldn’t protect students across all backgrounds from attending programs that can’t actually meet the promises that they make for the majority of their students,” he said. “We’re doing a disservice to students who attend these programs who expect by completing them they’ll immediately better their prospects and their financial security.”

At the heart of conversations about accountability are questions about the responsibility of any individual higher education institution. When the labor market has set a low wage for, say, certified nursing assistants — jobs that pay less than $15 per hour — should colleges stop educating workers to do those jobs?

“You might have a really high-quality credential — really well-designed, great content — and still have poor earnings outcomes,” said Michelle Van Noy, director of the Education and Employment Research Center at Rutgers University. “I certainly agree that the poor earnings are a real problem, but I don’t know if that means early child care workers shouldn’t get training.”

Anthony Carnevale, director of the Georgetown Center for Education and the Workforce, said he doesn’t think the government should remove funding from low-payoff certificates. For many people, he said, having a job is the first priority. The wage is secondary.

“There’s a moral question here,” he said. “You shouldn’t let your own ideals get in the way of someone else’s opportunity.”

At least one college has taken a hard look at graduates’ earnings without being prompted by new regulations. Texas State Technical College opted in 2011 to begin tying its state funding to the earnings bump it imparts, calculated as the difference between students’ earnings five years after graduation and the state’s minimum wage. 

Since then, the income of its graduates has increased 140 percent, said Michael Reeser, chancellor. But its policy has meant some difficult decisions, including closing programs. In 2019, the college shut down more than a dozen programs in fields including culinary arts, agricultural technology, chemical technology and computer maintenance. 

“Like any sort of change in a product mix, when it impacts people, it is really, really hard. And it’ll never be easy if a program is sunsetted because the economy isn’t demanding those skills or isn’t paying a reasonable salary for those skills,” Reeser said. “But on the other hand, we owe it to the taxpayers who support this college to constantly be spending their taxpayer funds in a way that produces the highest benefit for the student and the employers.”

Whether certificates that lead to low earnings will continue getting federal funding is still up in the air. But for some advocates, the choice is clear.

“The counterfactual to the suggestion that we shouldn’t close more programs is the status quo,” said Ezeugo. “Some programs, where despite even their best efforts half of students leave worse off than if they would have never attended at all — the equivalent of a high school diploma — stay open and continue to draw in vulnerable populations.”

This story about certificate programs was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for our higher education newsletter.

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The Department of Education has proposed regulations that would set a similar earnings threshold for career certificate programs in every sector, and for all degree programs at for-profits.