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Could an Associate’s Degree be More Valuable than a Bachelor’s Degree?

In recent years, there has been discussion over whether a college education is worth it. Indeed, in some cases, it turns out that going for a graduate degree might not be worth the cost [3].

Recently, though, even the value of the bachelor’s degree is being called into question. In fact, a recent study [4] from the Center for Education and the Workforce at Georgetown University indicates that an associate’s degree might be more valuable than a bachelor’s degree — at least at the outset.

Associate’s Degrees Outperforming Bachelor’s Degrees

One of the reasons that Associate’s degrees are doing so well right now is due to the fact that many Associate’s degrees come with some sort of technical or hands-on training. A community college education [5] can mean that the Associate’s graduate is equipped with skills that are immediately useful in a new job.

According to the Georgetown study, almost 30% of those with Associate’s degrees make more than those with Bachelor’s degrees. While that’s not a majority by any stretch, it’s still a significant amount community college grads making more than four-year grads.

Another thing to take into account is the amount of debt incurred. If you can get a good job with your Associate’s degree (think radiologist or some medical assistants), it’s much easier to pay off your community college debt. According to the survey, completing a two-year degree costs a little more than $6,000. Compare that with more than $20,000 at a four-year school. If you can make $50,000 a year out of community college, doing skilled work at an in-demand profession, you can pay off that $6,000 pretty quick. On the other hand, paying off more than $20,000 at an entry-level Bachelor’s job earning $20 an hour (a little more than $41,000 a year, assuming a 40-hour workweek), is a little more difficult.

Closing the Gap

Of course, there are some higher-paying jobs that can be had with a Bachelor’s degrees. Many engineering jobs and other jobs that involve higher math skills [6] can pay well at the outset. There’s still the issue of high levels of student loan debt, especially if a graduate degree or a private school is involved.

Another consideration is that the Georgetown study found that, over time, the Bachelor’s degree earners often overtake their Associate’s-wielding counterparts. In the long run, it might still pay to have a four-year degree — or even an advanced degree (depending on your major or specialty). However, it can take longer to overcome that pay gap when you factor in the cost of a four-year degree, which includes principal and interest on student loans, as well as the cost of four years’ worth of room and board, fees, and other costs.

Bottom Line

You don’t need to go the “traditional” route to earn a good living. There many Associate’s degree programs that can outfit you with the skills and experience needed to get started in a career almost immediately. The ability to earn a little more, a little earlier, can help you when the right decisions are made. Start contributing to a retirement account, pay off the small amount of student debt from the community college, and then consider getting another degree later — when you are assured a pay bump for the higher degree.

(Photo: Tax Credits [7])