How a Bachelor’s Degree Earnings Threshold Could Be Used for Graduate Program Accountability
The Education Department’s gainful employment and financial value transparency regulations will publicize whether a postsecondary program’s graduates have earnings below that of a typical 25 – 34 year-old in their state who did not go to college. Students might lose access to federal financial aid if they enroll in for-profit institutions or “gainful employment” programs that fail to meet this threshold.
However, the regulations do not apply different standards to undergraduate and graduate programs. In this report, I use American Community Survey (ACS) data to describe individual earnings with a graduate degree, and I explore the potential implications of using a higher earnings threshold for graduate education based on a hypothetical bachelor’s degree threshold, rather than earnings of an individual with no more than a high school education.
A growing fraction of U.S. workers have master’s, doctoral, or professional degrees, although this is more common among Asian and white Americans than American Indian, Native Alaskan, Black, and Hispanic populations. Workers with graduate degrees earn significantly more than those with only bachelor’s degrees, so much so that nine out of 10 workers with graduate degrees would likely meet a high school earnings threshold. Note that this does not mimic the outcome of GE regulations, however, which are applied to program-level earnings, not individual earnings, and which limit sanctions to for-profit and GE programs.
A smaller majority of graduate degree-holders would meet a higher threshold tied to earnings with a bachelor’s degree, although this would be very uneven across occupations. For example, workers in architecture and engineering who have a master’s degree are 88 percent likely to exceed typical earnings with a bachelor’s degree, but master’s degree-holders who work in social service are only 37 percent likely to earn that much. A more tailored bachelor’s degree threshold equal to median income in a worker’s own bachelor’s degree field would achieve a similar overall pass rate with more consistency across occupations. Either bachelor’s-level threshold is more likely to identify programs whose graduates end up in misaligned jobs that do not require graduate degrees.
