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Study Highlights Financial Value of Completing an Associate's Degree

While many high school students have their hopes pinned on four-year universities, a new report makes the case for the value of a community college education.

Over the course of their careers, the median earnings for those with associate's degrees are about $259,000 more than for high school graduates, according to findings released today from Nexus Research and Policy Center, an independent research organization, and the American Institutes for Research. Researchers analyzed the graduation and income data for students attending 579 two-year institutions, covering more than 80 percent of the country's community colleges.

The return on investment was highest for graduates from community colleges in California and Texas. North Carolina, Alabama, Tennessee, Arizona, Illinois, Georgia and New York also had graduates among the top income earners at community colleges.

"On average, students with associate's degrees earn more income than high school graduates and are less likely to be unemployed, even in harsh economic times," according to the report.

But the picture was mixed. In 30 states, there are some community colleges whose graduates' median net lifetime earnings were less than those of the state's high school graduates. Missouri had seven colleges in this category, followed by California with five.

While women comprised 58 percent of the students in the analysis, researchers found greater proportions of women major in programs of study that tend to offer low pay.

The authors of the report recommend that policymakers use performance funding formulas to reward progression, retention, and completion at community colleges. They also suggested a focus on technical training and connections between schools and their local labor market, as well as better data collection on success at the student and program levels.

Other reports from State Higher Education Executive Officers Association  and  Georgetown University and have spelled out research showing the higher the degree a student earns, the higher the earnings potential for graduates.

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