March 27, 2022
This report estimates return on investment (ROI) for nearly 17,000 associate degrees and certificates, defined as the increase in lifetime earnings minus the costs of the degree or certificate.
For students who graduate on time, the median associate degree has an ROI of $167,000. But accounting for low completion rates at associate degree-granting institutions reduces median ROI to just $22,000.
Associate degree programs in registered nursing and mechanic and repair technologies usually have high ROI, while graduates of liberal arts programs generally come out underwater.
Undergraduate certificate programs produce median ROI of $115,000, which drops to $53,000 after adjusting for completion rates. Strong certificate programs include precision metal working and licensed practical nursing; the weakest is cosmetology.
In his 2022 State of the Union address, President Biden called public community colleges “America’s best-kept secret.” Community colleges and other fewer-than-four-year institutions in the private sector offer a variety of credentials below the bachelor’s degree level, including postsecondary certificates and associate degrees. Many tout these credentials as low-cost alternatives to a bachelor’s degree. Indeed, some associate degrees and certificates offer excellent financial payoffs. But many others do little to increase their students’ earnings capacity.
This report presents estimates of return on investment (ROI) for over 10,000 associate degrees and 6,000 undergraduate certificates. In financial markets, ROI measures the profitability of an investment relative to its cost. This study defines the ROI of a degree or certificate as the increase in lifetime earnings a student can expect from that credential, minus the direct and indirect costs of obtaining it.
The median associate degree is worth $167,000 for students who graduate on time. Associate degrees in registered nursing and mechanic and repair technologies often deliver considerably higher ROI. But a majority of two-year degrees in the liberal arts leave students worse off financially than they would have been otherwise.