Two-year degrees gain appeal

If all goes as planned, Mike McConaughy will complete his associate of applied science degree at Kirkwood Community College next year and go on to get a bachelor's degree at University of Iowa.

But, McConaughy said, he also knows plans can change, and he's comforted by recent cost-benefit reports showing the rising value of associate degrees alone.

'Absolutely you have options with two-year degrees,” said McConaughy, 21, of Iowa City and originally from Downers Grove, Ill.

More states have started tracking graduate incomes, and the numbers show some two-year degrees - which cost a fraction to attain - result in much higher earnings than some four-year degrees.

For example, College Measures, a research organization monitoring earnings and other higher education outcomes, has reported some technical associate's degrees produce first-year pay topping $70,000.

In Texas, among the handful of states to gather comprehensive income data of late, the average starting salary for a graduate with a bachelor's degree is about $40,000, according to a Reuters report.

Meanwhile, the average net annual cost to earn a two-year degree - including tuition, fees, room, and board, minus financial aid - is about $6,000, compared with more than $12,800 at a public four-year institution and more than $23,500 at a private four-year institution, according to the College Board, a not-for-profit corporation that provides resources, tools, and services in the areas of college planning, recruitment, admissions, financial aid and admissions.

Although national opinion long has valued four-year degrees over two-year degrees, a 2011 report out of Georgetown University's Center on Education and the Workplace found one in four people with associate's degrees make more than the average of someone with a bachelor's degree.

And officials with Iowa's community colleges said they're seeing the evidence in students pursuing careers - particularly in technical fields - aligned with their specific strengths.

'It's going to depend on your skills and abilities, and perfecting the skills needed for that type of degree will play a huge role in what the salary range will be,” said Danielle Ebaugh, career services coordinator for Kirkwood Community College in Cedar Rapids. 'And what is really important to know is we have had a big need for technical two-year degrees recently.”

Rob Denson, Des Moines Area Community College president, said he's never going to discourage someone from going on to get a four-year degree and believes in continuing education throughout a career. In many areas, he said, four-year degrees and beyond still produce higher earnings than two-year degrees.

'For long-term success, I think it's best to come to community college, get a degree, get a job, and as you do that and move up in the organization and your career, go back and get a four-year degree,” Denson said. 'In order to be successful, you have to continue your education so you are qualified for that next big promotion that comes along.”

College Measures reports early career median pay for DMACC graduates at $30,800 and Kirkwood graduates at $32,400 compared with $42,100 for University of Iowa graduates or $45,700 for Iowa State University graduates.

Still, Denson conceded, some employers have reported a recent spike in demand for skilled workers and are willing to pay more to get them.

'As the demand for construction workers, framers and nurses goes up and the supply is limited, they begin to pay more to attract good talent,” Denson said.

Supply and demand

According to the U.S. Bureau of Labor Statistics, four of the 30 fastest-growing jobs require associate's degrees. Those include dental hygienist, with median annual earnings of $70,210, diagnostic medical sonographers, with earnings of $65,860, occupational therapy assistants, earning $53,240, and physical therapist assistants, at $52,160.

Other two-year degree positions producing above-average pay include funeral service managers at $66,720, web developers at $62,500, nuclear technicians at $69,060, radiation therapists at $77,560, and registered nurses at $65,470.

Although median weekly earnings for bachelor's degree earners reached $1,101 compared with $792 for those with associate's degrees, according to the Bureau of Labor Statistics, those numbers don't represent the full range of earnings possible for two-year degree earners in today's work force.

'Information technology is the best example,” Denson said. 'In the not-so-distant past, you needed a four-year degree and often some experience to get a good job.”

Today, Denson said, companies are coming to DMACC in need of new talent, and the college is working with them to custom design employees with the specific skills they want.

'Then they leave us after two years and make very very good money - like $60,000 a year,” he said. 'A lot of it is because of supply and demand.

'Lots of companies aren't getting the employees they need, so they are coming to us, and we are designing a degree program that's specific to their needs.”

In addition to information technology, Denson said DMACC is well connected in other industries such as construction, welding and mortuary science. Companies might offer students paid internships while they complete their program.

'That gives them a chance to understand a person's talent,” he said. 'And we have seen very good success with the companies then hiring them.”

‘We need to do all we can'

The rising value of associate's degrees is important when considering college affordability woes, which have led to more than $1 trillion in student loan debt, Denson said.

'Students are coming out with massive debt, and we need to do all we can to decrease the cost,” he said.

Gov. Terry Branstad has been pushing to bring more jobs to the state, and many of those are vocational-skill positions that require one- or two-year degrees, according to Denson.

'And we are not trying to attract companies that don't pay well,” he said. 'We want our families to have sustainable lives.”

Ebaugh said those new jobs might be part of the reason Kirkwood of late has seen more people seeking specific-skill degrees later in life.

'Not only are people doing two years versus four years, but we have seen people go the four-year route and then come back to get a one-year or two-year degree,” she said.

Daveon Curry, 22, of Iowa City, said he has big plans to own his own studio or maybe operate a real estate business that fixes old properties and resells them. He just enrolled at Kirkwood and wants to transfer to UI at some point.

'But two-year degrees are valuable,” he said, adding he might not need a bachelor's after all. 'I think I could make it through.”

Reuters contributed to this report.