Urban Wire Making Sure College Pays off for Jobs in Health, Education, and Social Services
Molly M. Scott
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photo of health care workplace

Is college really worth it? With the high cost of college, policymakers, advocates, parents, and students alike are increasingly asking whether higher education pays off in the long run.

In response, the Biden administration enacted the new Gainful Employment Rule, which mandates more systematic reporting on earnings and debt for specific degrees and institutions in 2024, and sets accountability standards for nondegree credentials and those issued by private for-profit colleges.

Minimizing debt is important to protect consumers from predatory practices, and the move to link college to labor market outcomes is long overdue, as most people enroll with the reasonable expectation of earning a better living when they invest in education.

But the truth is, educational institutions do not control wages. And many of the credentials that are likely to raise legitimate questions about earnings—whether it be a short-term medical assisting credential or a psychology master’s degree—are problematic not because of the institution where they are offered but because of the occupation they are preparing people for.

In a brief released today, we find many of the jobs that require a degree beyond a high school diploma do not reliably pay earnings premiums. This includes more than one-third of jobs requiring a short-term nondegree credential and nearly half of those requiring a master’s degree.

That means even the very best educational institutions and programs will struggle to offer credentials that meet reasonable earnings standards in these fields—even if the credentials themselves are free.

These jobs are heavily concentrated in the kinds of critical public service occupations that are already experiencing acute shortages in local communities. Most of them are concentrated in health care (34 percent), education (28 percent), and community and social services (19 percent).

Any meaningful approach to addressing labor shortages in health, education, and social services in local communities and ensuring returns on investment for students must go beyond the gainful employment rule and:

  • Bring together diverse stakeholders in key sectors.
    They may include major employers in a given sector, unions, or other worker organizations; state licensing officials; state and local policymakers; local workforce boards; colleges and higher education institutions; or even leadership from K–12 education.
  • Use local data to inform action.
    Data on wages, worker shortages, job listings, and knowledge of licensing requirements, as well as data on the cost of local programs and student debt, are essential to support decisionmaking.
  • Reexamine licensing requirements.
    Sector-based initiatives should reevaluate the education and training requirements for licensed occupations alongside concrete data on earnings for these occupations and the cost of meeting these requirements. This will help identify the specific occupations where the state could allow workers more flexible ways to demonstrate their qualifications or where educational requirements could be waived altogether.
  • Address other types of degree inflation in hiring
    When designing job listings, employers should evaluate the merit of specific educational requirements—not only terms of their likelihood to align with essential skills and competencies-- but also in the context of the salary offered and the cost of meeting those requirements.
  • Reinvent how communities educate and train for these careers. 
    Communities could embed competency-based training into lower, less costly degrees (e.g., offering more nondegree credentials in high school or more of the intensive training and skills needed for counseling jobs in associate’s or bachelor’s degree programs). They could also create apprenticeships or other on-the-job training as the on-ramps.
  • Target student debt relief and subsidize education and training for jobs with low earnings premiums. 
    The federal government could expand existing debt relief for people in specific health, education, and social service States and localities could also consider subsidizing the costs of training and education.
  • Use legislative action to raise wages and improve working conditions in key sectors. 
    The federal government could raise reimbursement rates for Medicare and Medicaid or create wage parity for Head Start teachers with kindergarten teachers in the next reauthorization. States can also pass legislation that raises wages and help establish wage boards to negotiate wages and working conditions in key sectors.

The new federal rule, coupled with labor shortages, offers a great opportunity to reinvent our approach to training people for good jobs in our communities. Creative and collaborative responses can help us meet this challenge.

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Research Areas Workforce
Tags Employment Employment and income data Higher education Job markets and labor force Job opportunities Job training Wages and economic mobility
Policy Centers Income and Benefits Policy Center
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