Frequently overlooked in the discussion of whether there is or is not a higher education bubble are community colleges—despite the fact that this sector within public higher education represents 43 percent of first-time freshman and 44 percent of all undergraduates.1 For the most part, the “bubble” discussion has focused on whether the cost of higher education provided by four-year universities and colleges, both public and private, has grown to such a level that the benefit or life-long economic return to the student is not worth the price tag. Those suggesting the existence of a “cost bubble” maintain that students are being asked to spend a large amount of money through tuition and fees for a product—a bachelor’s degree—that does not have the promised result for a growing percentage of students. They further maintain that the public’s strongly held commitment to the overstated promises of higher education have actually led to an “enrollment bubble” among those seeking the baccalaureate.2 Since much of higher education is publicly subsidized, the enrollment bubble can lead to wasteful public expenditures, either through direct appropriations or through federal financial aid grants and loans.
Community colleges may well represent an alternative that avoids the potential trap of a higher education bubble. Since the early twentieth century, community colleges have been strongly committed to two missions that address “bubble” concerns. In particular, these institutions make readily available freshman- and sophomore-level courses that transfer to a four-year university at low cost. Community colleges also provide marketplace driven career programs such as nursing or applied technology occupations that offer the promise of employment after a reasonable, if not modest, investment by the student or the taxpayer. This workforce function is manifested in programs that could potentially be completed in two years or less depending on the full-time versus part-time status and the academic readiness of the student.
How Community Colleges Address the Cost Bubble Debate
A comparison of tuition and fees between publicly funded universities and community colleges reveals significant differences. According to a recent College Board study, the average annual cost of tuition and fees for a full-time student at a community college is $2,713, while at the public university the cost is $7,605. While tuition and fees may vary among the nation’s nearly 1,000 public community colleges, they do have tuitions that are on average approximately 36 percent of their four-year public counterparts. Moreover, these affordable institutions are available within reasonable driving distance of nearly every American.3
There are, of course, a number of factors that drive the costs of higher education, including academic facilities (science labs, libraries) and non-academic facilities (recreation-oriented centers), but a major factor in the cost difference between public community colleges and public four-year institutions is faculty workload. Full-time community college faculty frequently teach four or five courses per semester, which is far more than the number of courses full-time four-year college faculty teach. Essentially, community colleges are teaching institutions with both faculties and facilities overwhelmingly devoted to instruction. Moreover, to the extent that online learning can be employed in a cost-effective manner to deliver instruction, community colleges were early adopters of such learning and have a higher proportion of classes taught through this format than four-year institutions.4
A recent debate about higher education in Texas further highlights the cost side of the bubble discussion. Governor Rick Perry has called for the availability of a $10,000 bachelor’s degree for at least 10 percent of all the degrees awarded by public institutions. Currently, the average total cost (including books) of a four-year degree at Texas public universities is $31,696. While many question whether this $10,000 goal is achievable, it is worth noting that three Texas community colleges that offer special bachelor’s degrees in applied technology (which is part of a growing nationwide trend)5 have costs ranging from $12,000 to $15,000 for tuition, fees, and books.6
These data suggest that a cost-benefit analysis ought to lead many students to consider attending a local community college for freshman- and sophomore-level courses prior to transferring to a four-year university to complete a bachelor’s degree. While the educational cost savings would exist for any student, the community college pathway is an especially significant strategy for students in majors linked to future occupations with lower lifetime earning potential. A recent study by the Georgetown University Center on Education and the Workforce found that some undergraduate degrees “pay off” a lot more than others—as much as 300 percent more. For example, this study found the largest, lifetime earnings gap between engineering majors and education majors. The study found majors in counseling/psychology, early childhood education, and human services among the ten majors with the lowest median annual earnings after graduation.7
Lifetime earnings estimates have been a source of controversy in the entire bubble debate with optimists such as the College Board using an $800,000+ lifetime earnings increase over high school graduates, and pessimists suggesting a number closer to $300,000.8 Notwithstanding which projection is more accurate, the soundness of completing freshman- and sophomore-level coursework at a community college appears strong for many occupations currently requiring a bachelor’s degree by employers.
All too many students incur unnecessary levels of debt because they don’t take advantage of the community college alternative path to a bachelor’s degree. While estimates of accumulated debt vary, community college presidents in a May 2011 Pew survey estimated that 69 percent of their students had borrowed less than $10,000 for their education.9 In contrast, presidents from four-year private colleges and universities estimated that 47 percent had borrowed between $20,000 and $29,999 and another 19 percent had over $30,000 in borrowings. Public university presidents estimated that nearly half of the students had borrowed between $10,000 and $19,999, but 37 percent had borrowed over $20,000.10
The Pew survey results reinforce recent data that found a significant number of graduating seniors, those receiving salaries below $41,500, are at annual income levels below that estimated to be necessary to “afford to pay off” the current average student loan.11 Studies have found that 20 percent of those who make less than $35,000 a year had either a bachelor’s degree or a master’s degree and some argue that for this group in particular, the student investment cost has not paid off.12 Therefore, it should not be surprising that the Chronicle of Higher Education reported concern over a recent Pew survey of graduates that found increased awareness among some college graduates that not all degrees are a good investment. In particular, the Chronicle of Higher Education labeled it a “warning sign” that “a quarter of college graduates who earn less than $50,000 now say their degree was a bad bargain.”13
However, the college graduate survey may also be viewed from a different perspective: as an indication that community colleges are not yet sufficiently valued by the public. If only 25 percent are willing to question the value of their four-year college degree—even if they are earning less than $50,000 annually—a large sector of the public is unaware either of the economic advantages of taking freshman- and sophomore-level courses at a community college or the economic advantage of choosing a different postsecondary educational path. This lack of awareness, however, much more likely can be accounted for by the unwarranted but lingering “prestige deficit” of community colleges. This perspective is unwarranted because many studies demonstrate that community college “transfers” do as well upon transfer, in pursuit of a degree, as students who begin their studies as freshmen at a four-year university.14 The competition and status that accompanies seeking admission to a four-year college continues to dominate the college selection process even by students who might well have altered their cost-benefit equation by starting at a community college and later transferring or by pursuing a technical degree such as nursing or computer technology with greater market value and higher salary potential.
It is interesting to contemplate that even if the cost bubble of tuition and overall expense burst within the four-year college and university sector, public community colleges would retain their programmatic advantage in offering career preparation in many fields that are not offered at four-year institutions. Moreover, because they offer flexible class schedules and short commuting distances, community colleges continue to appeal to students, especially working adults, who are combining college attendance with either family or work responsibilities even with cost deflation in the four-year higher education sector.
How Community Colleges Address the Enrollment Bubble Debate
The higher education bubble debate transitions from a cost bubble to an enrollment bubble debate when the discussion focuses on the question of whether there is a good match between the marketplace and the graduates from our colleges and universities. Defenders of the current higher education system of course would argue there is a good match, while critics suggest that at a minimum there is a mismatch between job market demands and the enrollment and graduation supply provided by four-year colleges and universities. Richard Vedder and Andrew Gillen, for example, quote a Department of Education survey of college graduates, four years after graduation, which found that only 60 percent were employed in jobs that required a four-year degree.15
Criticism has also been focused on the Georgetown University Center on Education and the Workforce (CEW) study of the future educational requirements meeting the occupational employment projections of 2018.16 The center claimed that by 2018 the share of jobs requiring a post-secondary degree with a minimum of an associate’s degree would rise to 45 percent of the workforce, with 23 percent requiring a bachelor’s degree and 10 percent requiring a master’s degree or better. The projection of 45 percent represented an 8 percent proportion shift from the 1992 level of 37 percent with such credentials. The current study suggests that there is a major need for an expansion of higher education degree attainment at many levels. However, using Bureau of Labor statistics and the appendices of the CEW report, George Leef has demonstrated that in fact many of the actual current incumbents to these projected-growth jobs and occupations did not have the “required” degree. Leef considers this a clear example of unnecessary creeping “credentialism” that the CEW projections cannot really demonstrate as necessary for many of these occupations.17
Looking at comparable data, the Texas Comptroller issued a report that identified a particular future need in Texas for more employees with technical occupational backgrounds.18 The report urged expansion of community college workforce training programs rather than an unfocused expansion of baccalaureate programs. The study found that 80 percent of all Texas jobs did not require a bachelor’s degree, including 44 percent of jobs paying an above-average income. The Texas study stressed that future Texas job requirements would closely follow U.S. Department of Education estimates that about 80 percent of the fastest growing job categories will require some post-secondary education, but not a bachelor’s degree. The report’s key finding was: Many state policies are geared largely toward pushing all students into university programs….These policies may inadvertently send the signal that the four-year degree is the only path to success…. …The impending wave of retirements in the baby boom generation will remove many of our most experienced and skilled technical employees from the workforce…. …Texas’ publicly funded higher education institutions are not meeting this demand. In 2007, for example, Texas had roughly 44,000 job openings for workers with some postsecondary technical or career training, but the state public institutions produced just 36,442 students with the skills needed for those jobs. By contrast, in the same year, our public universities produced more bachelor’s, master’s and doctoral graduates than the economy could employ, awarding about 104,000 degrees while the state added just 85,000 jobs requiring a bachelor’s degree or above…. Private Texas colleges and universities added another 26,000 graduates for a total oversupply of about 45,000.19
Many state policies are geared largely toward pushing all students into university programs….These policies may inadvertently send the signal that the four-year degree is the only path to success….
…The impending wave of retirements in the baby boom generation will remove many of our most experienced and skilled technical employees from the workforce….
…Texas’ publicly funded higher education institutions are not meeting this demand. In 2007, for example, Texas had roughly 44,000 job openings for workers with some postsecondary technical or career training, but the state public institutions produced just 36,442 students with the skills needed for those jobs.
By contrast, in the same year, our public universities produced more bachelor’s, master’s and doctoral graduates than the economy could employ, awarding about 104,000 degrees while the state added just 85,000 jobs requiring a bachelor’s degree or above…. Private Texas colleges and universities added another 26,000 graduates for a total oversupply of about 45,000.19
While it is altogether possible that other states will have different skilled workforce needs than Texas, it is realistic to assume that an increased emphasis on sub-baccalaureate higher education is appropriate nationally in technical programs strongly linked to the workforce. Moreover, the failure to focus on expanded community college technical programs may well have created a mismatch between future employment demand and supply by our entire current higher educational system. In particular, some aspects of the enrollment bubble have been created at the four-year university level by over-enrollment in some programs for which there is insufficient employment demand.
If the enrollment bubble at four-year universities were to burst, community colleges would gain more students and attempt to increase their offerings and capacity in technical workforce programs. Moreover, a significant reduction in the demand for baccalaureate degrees would reduce community college “transfer” programs. However, given the cost advantages over for-profit private technical institutions, community colleges would not suffer enrollment loss to the for-profit sector.
A burst in the enrollment bubble at the four-year level might lead to reallocation of public tax dollars from public universities to public community colleges, but the residual prestige and legislative power of public universities might delay or hamper any reallocation of funds. In the latter situation, public community colleges without the resources to expand capacity might have a tendency to increase “admissions requirements” for high-demand programs.20 In addition, without additional or sufficient state funds to increase capacity, community colleges would be under pressure to increase tuition and fees.
Are Community Colleges Immune from the Higher Education Bubble Criticism?
The preceding discussion might lead the reader to believe that community colleges are a fail-safe alternative to the higher education bubble. They are not! While community colleges do offer specific cost-benefit alternatives to higher-priced four-year universities and do offer many technical programs with good employment prospects, they can also fall into some of the same traps that have ensnared four-year colleges and universities. For example, some community colleges have offered programs in occupational areas with limited economic return despite their low cost. While this happens infrequently at the two-year associate degree level, it can occur in the absence of careful and vigilant monitoring in shorter certificate programs. Moreover, an extreme “laissez-faire” or overly permissive policy on remediation might lead to an enrollment bubble of unprepared students with limited potential to complete any program.
One recent study, Certificates Count: An Analysis of Sub-baccalaureate Certificates, reviewed Department of Education data and concluded that shorter term certificates of less than one year frequently did not provide labor market return for graduates.21 They found such programs existing in community colleges in the health care area. The report mentioned nursing aide and certified nursing assistant programs as examples of short-term programs in overproduction with poor economic payback. While some community colleges have carefully tied several shorter certificates together,22 the study concluded that there is little evidence that many students are building these “chunks” into more marketable, longer certificates or associate degree programs. Moreover, even longer term certificates (more than one year) in programs such as medical assistant, medical insurance coders, dental assistant, and massage therapist may also offer limited economic rewards for the graduates. While most of the debate over the payback value of some sub-baccalaureate certificate and degree programs has been focused on the for-profit, private vocational colleges and the “gainful employment” regulations,23 it is important to recognize that community colleges frequently have similar programs—and at much lower costs and accumulated debt for students.
The good news is that community colleges generally operate under periodic, state mandated reviews of their degrees and certificates programs. This review includes their market relevance as the key criteria needed to retain a program and continue to receive state subsidy. In fact, community colleges generally have more flexibility to create and eliminate programs than their four-year counterparts. Notwithstanding this flexibility, however, some schools will attempt to hold onto authorized programs even beyond their marketability. Therefore, an honest assessment must acknowledge that community colleges are also mildly susceptible to some cost bubble criticisms.
The most serious higher education bubble issue community colleges face is a potential enrollment bubble. Since these institutions do not have restrictive admission standards, they will have students attending who are not prepared to engage in collegiate-level coursework. In fact, in 2008, an estimated 44 percent of community college students under the age of twenty-five were taking at least one remedial course.24 At a minimum, these students will have time added to their pursuit of a degree or certificate along with increased cost. Usually introductory courses in college-level English and math require or “mandate” successful completion of remedial courses (generally labeled “developmental”) prior to enrollment.
Some community college educators have seriously questioned the current approach to such education, including those who would abandon any mandatory requirements. In community college circles, in fact, there is a struggle between those who advocate a “laissez-faire open-door policy” of allowing immediate access to college-level coursework to virtually all students and those who favor “structured open-access,” which maintains mandatory pathways to improve student skills prior to engaging in collegiate-level work.
Open-door policy advocates are purposely committed to a major expansion of enrollment even if many of these students are not prepared for college-level study. While the structured open-access advocates acknowledge that the curricular design of remedial/developmental classes might need to change, they do not believe it is appropriate to eliminate or water down academic standards.25 Rather than encouraging an enrollment bubble of unqualified students, structured open-access advocates acknowledge that community colleges are critical “gatekeepers” of higher education quality. However, keeping with their mission of expanding access to high-quality higher education at an affordable cost, community colleges also specialize in providing students second chances to learn, through multiple and innovative approaches, what ideally they should have learned in high school or even earlier. However, they do insist they learn it! As long as the advocates of this form of a “tough love” policy continue to represent the majority viewpoint, community colleges will offer an answer to the enrollment bubble controversy.