Unfinished Business? A Closer Look at the "Some College, No Degree" Population

Introduction

Higher levels of education are, on aggregate, associated with increased employment, higher wages, and better health outcomes. However, nearly 40 percent of those who enroll in higher education never complete, often leaving them with student loan debt, lost wages from time spent in college, and no benefit of the earnings premium associated with degree attainment. These so-called "some college, no degree" (SCND) students may find the path to employment difficult or reach a wage ceiling quickly in the labor market. A recent report from the National Student Clearinghouse (NSC) finds that as of 2022, there were 36.8 million adults (including over 3 million in the Fifth District) between the ages of 18 and 64 who had previously enrolled in college but left without receiving a bachelor's degree, associate degree, or long-term certificate.

How worried should we be about this population? Not all jobs require degrees, and students are increasingly questioning whether college generates the wage premium it once did. But these are students who made a conscious choice to enroll in higher education, and it's reasonable to assume they weighed the costs and benefits and opted in. For some students, the choice to leave is not their own, like in the case of not meeting academic standards, or "failing out." However, there are many more reasons why students choose to stop out or drop out of higher education. In our outreach with community colleges in the Fifth District, we ask leaders about the top reasons that students do not complete a program and what prevents them from re-enrolling after leaving higher education. A common refrain is "life gets in the way." Non-academic challenges like caregiving responsibilities, lack of transportation, financial constraints, and work schedules are frequently cited barriers to education. But we also hear that students leave the institution once they feel like they have gained the skills they need, which sometimes occurs before they have completed a degree or certificate program. For example, employers may want workers who have basic welding skills, but don't require welders to have a degree. Students might take a semester of courses, obtain some level of skill, and leave the institution to enter the workforce.

The SCND population includes people who took a few classes a decade prior and people who are only a few credits shy of a bachelor's degree. It could also include adults who are currently enrolled in postsecondary education and actively working toward a degree. But there is also an important complicating factor that we must recognize. The "some college, no degree" category includes individuals who did attain a short-term credential or certificate via non-credit programs. As we have written about before, these short-term credentials can result in strong labor force outcomes. Therefore, it is likely that these individuals are some of the higher performers in the "some college, no degree" category of individuals, likely skewing the income and employment data in a positive direction compared to those who did not attain any higher ed credential.

So, what do we know about the employment outcomes of prime-age adults who attended college but left without a degree?

How Large Is the Some College, No Degree Population?

Much of what we know about how labor market outcomes vary by educational attainment in the United States is based on national surveys of individuals and households like the Current Population Survey (CPS) and the American Community Survey (ACS). Publicly available data from these surveys and others tend to categorize educational attainment based on secondary and postsecondary milestones (usually degree attainment). While some data offer a more detailed breakdown, a common way to break out educational attainment is into four levels:

• Anything less than a high school degree
• High school degree or equivalent (e.g., GED diploma or certificate)
• Some college or an associate degree
• Bachelor's degree or higher (e.g., master's, professional, doctoral)

In the CPS, a monthly national survey of households administered by the Bureau of Labor Statistics and the Census Bureau, respondents who report "some college, no degree" are broken out from those who report earning an associate degree. Nationally, the SCND population accounted for roughly 14 percent (32.8 million) of the population ages 25 and older. Eleven percent of the population reported having an associate degree.

The ACS data allow us to break this down further and examine educational attainment across Fifth District states. The variation is considerable, with a much higher percentage of individuals with a bachelor's degree or higher in the District of Columbia than the other Fifth District states. In all six of the Fifth District geographies, at least 11 percent of the population over age 25 is in the SCND population.

Labor Force Participation and Employment Among SCND Adults

Historically, in many datasets, the SCND and associate degree populations have been grouped together into the "some college or associate degree" category. The data suggest reason to differentiate between these two populations. The labor force participation rate — the share of the population that is either employed or actively looking for work — for adults ages 25 and older with an associate degree was 64.2 percent in 2023, while only 60.6 percent of those with some college, no degree, were in the labor force. This is higher than the 56.7 percent of high school graduates with no college degree who were in the labor force, but well behind the share of adults with at least a bachelor's degree (73 percent).

Among prime-age adults (ages 25-64) who are in the labor force, the broad "some college or associate degree" labor force tends to have higher rates of unemployment than those with bachelor's degrees. But within this broad category, the SCND population tends to have higher rates of unemployment than workers with an associate degree. However, since the SCND group includes workers with short-term workforce-oriented credentials, it is reasonable to think that the SCND individuals with no credentials likely have the highest rates of unemployment within this group.

There is significant variation in the quality and field of study within all levels of educational attainment, of course, and many factors beyond education influence labor market behavior. And in each of these categories, we cannot discern if workers are employed in a field directly related to their education and training. But the "some college, no degree" category is particularly murky because students are defined by what they don't have (a college degree) rather than what they do.

The Road Less (but Increasingly) Traveled

In the Richmond Fed's outreach in the Fifth District, we regularly hear employers emphasizing the value of soft skills in new hires. But the hard skills are valued, too: In fact, there is evidence that students who enroll in career and technical programs — but do not complete — experience higher wages than those who didn't attend at all.

Workers in the SCND population may possess a licensure or a stackable credential that does not require an associate degree but is valued by employers. And the number of adults choosing this path is growing: We've written about the rise in non-credit workforce training at community colleges as employers and students are looking for a shorter path to the workforce. Community colleges regularly communicate to us that these non-degree, non-credit programs are growing more rapidly than more traditional degree programs. They also tell us that this aligns with employer demand. Employers are looking toward short-term credentials and skills-based hiring rather than relying on degree attainment.

The Need for Better Data

It is unfortunate that we do not know more about the SCND population, and it is impossible to separate SCND adults who have a credential of some sort and those who do not have a credential at all. More detailed and higher quality data are needed to better understand this population and their labor market outcomes. Without these data, it is very difficult to know the true return on non-degree credentials and the value they provide to those who attain them. As demand shifts toward these credentials, the need for enhanced data grows.

We are working toward improving non-credit data at the community college level via the Richmond Fed Survey of Community College Outcomes. In addition to collecting data on associate degrees, diplomas, and certificates, we are also collecting data on the number of students in non-credit, non-degree programs at each institution. Later this fall, we will have data to release for every community college in the Fifth District. Stay tuned!

Views expressed are those of the author(s) and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.