* College graduates with prior associate's degrees earn $2,426 less per year than graduates of four-year schools, and people who earned master's degrees with prior associate's degrees earned $2,117 less per year, the study shows.
* People who earned doctoral or professional degrees with prior associate's degrees earned between $6,884 and $7,768 less per year.
Source: Federal Reserve Bank study
Students who transfer to a university from a community college can expect to earn less than those who begin their educations at four-year schools, a new study shows.
"Regardless of the highest degree, people who started their post-secondary education with an associate's degree earn less on average than those who started at a four-year college," according to a study by the Federal Reserve Bank of St. Louis.
The research results come as educators at Chattanooga State and UTC are encouraging students to attend more affordable community colleges before transferring to four-year schools to earn college degrees.
In November 2008 the schools signed an agreement allowing students with associate's degrees from Chattanooga State Technical Community College to transfer to the University of Tennessee at Chattanooga as juniors.
Such agreements are becoming more common across Tennessee and the nation as part of efforts to make higher education more affordable. Tuition at two-year colleges typically is substantially less than at four-year schools. Tuition for a full-time, in-state student at UTC is $2,655 per semester, while tuition at Chattanooga State is $1,398.50, records show.
Natalia Kolesnikova, an economist at the Federal Reserve Bank of St. Louis and the study's author, said the earnings gap exists for people of the same gender, race, education, experience level, field of study and type of college attended.
"There is indeed a 'penalty' for those entering post-secondary education at a community college," the study states.
REASONS FOR PAY GAP
Reasons for the pay discrepancies uncovered in the study eluded Dr. Kolesnikova and leaders of Chattanooga State and UTC.
Dr. Kolesnikova said she hypothesized that the quality of education at the two types of schools was different, but her research did not find an employer bias against those with associate degrees. More research is needed to explain the gap, she said.
Phil Oldham, provost at UTC, agreed but said a perception persists that the quality of education at community colleges falls behind that of universities.
"Community colleges vary, but overall they get a bad rap," he said. "I don't think it (the pay gap) is a factor of the community college experience itself. I think it is something else."
Bill Staley, president of UTC's student government association, said students commonly take their core classes at community colleges when they can't pass them at their four-year institution.
"My English class that I took at a community college was a joke. It wasn't as rigorous," he said.
However, he said he doesn't think employers pay attention to whether four-year graduates have associate degrees.
"It depends on how they market themselves. If they want to talk about going to a technical college, it is fine," he said. "I don't think employers judge it as much as I have heard in the past."
Robbie Myers, who received an associates degree and is working on a four-year degree at UTC, said he doesn't expect to be penalized for having a two-year degree, but even if he does earn less, he won't regret the decision.
The study, he said, gives the wrong impression of community colleges.
"There are people that have a lesser opinion of community college," he said. "There is a stereotype that they are high school dropouts and went to community college. I know plenty of very capable of four-year students and I know plenty of capable students with associate's degrees."
Jim Catanzaro, Chattanooga State president, said the pay "penalty" doesn't make sense. Most employers wouldn't know that a student who graduated from a four-year school earned a two-year degree first, he said.
"I don't know of any employer that would pay differentially," he said. "Across America there are chief financial officers and chief executive officers that have associate degrees, and obviously they rose up in the ranks."
AN ESSENTIAL ROLE?
Dr. Oldham said students choose to attend community colleges for a number of reasons. They might not be prepared for the academic rigors of a four-year school or might not be able to afford the tuition. They might be unsure about a field of study or career path.
In general, though, he said they are less driven than those who attend a four-year school from the beginning.
"It indicates there may be, in general, a little less focus or decided on what they want to do early on," Dr. Oldham said. "That choice is also ultimately is driving their earnings potential."
Dr. Catanzaro surmised that the career choices of students who first pursue associate degrees could explain the pay gap, although the Federal Reserve study compared earnings of two- and four-year school graduates working in the same field.
Charles Manning, chancellor of the Tennessee Board of Regents, said community colleges play an essential role in encouraging students who normally wouldn't pursue higher education to do so. The board oversees Tennessee's 13 community colleges.
Two-year schools are local, less intimidating and more affordable, he said. Students who graduate from them are more committed to working in their communities, he said.
"You are dealing not with the same set of students," he said. "The well-motivated and well-prepared students do go to a four-year institution. Many in a community college would not have gone (to college) if they hadn't gone to a community college. The alternative is not to have gone at all."