Earning

Are apprenticeships worth it? Yes, study finds: They can help you earn more money

For community college students, an apprenticeship could be the key to higher lifetime earnings.

Twenty/20

For community college students, an apprenticeship — during which a company pays for a student to take classes, earn a certification, and do hands-on training — could be the key to higher lifetime earnings and less student debt.

Graduates of both community college and then an apprenticeship program at the Federation for Advanced Manufacturing Education, called FAME, in Kentucky earned 63% more money than those who pursued similar trade jobs with an associate degree but without an apprenticeship, according to a new study by Opportunity America and the Brookings Institution. FAME matches employers with community colleges, meaning students get paid while working and have their coursework paid for as well.

Graduates from the Kentucky apprenticeship who also graduated from community college earned $59,164 one year after completing the program, the study found. Those who graduated from high school and community college and held similar jobs but who didn't do the apprenticeship earned $36,379.

After five years, FAME graduates earned $98,000 and non-FAME graduates earned $52,783. Fame graduates were also more likely to finish their two-year degree, researchers said.

Apprenticeships represent an attractive option for students who want to get paid while pursuing an associate degree, says study co-author Tamar Jacoby, president of Opportunity America. "There's been a revolution in the last 10 years or so," she says. "People thought apprenticeships were a dead end for less achieving students or people of color." Now, perceptions are shifting.

Here's how apprenticeships work, and how they can benefit you.

Apprenticeship graduates earn more and have less student debt

"The point of apprenticeships is that you get paid while you're working," Jacoby says. "You're in school two or three days a week, and then at the job two or three days a week. What that means is that the company has to pay enough to pay for your education costs."

Despite the rising cost of college, many Americans feel obligated to pursue higher education because job options for those without a degree are disappearing.

"In 1980, two-thirds of jobs in America were open to people who only had a high school diploma," Jacoby says. "Now, only one-third of jobs are open to people with high school diplomas."

Only one-third of jobs are open to people with high school diplomas.
Tamar Jacoby
president of Opportunity America

More apprenticeships could relieve some of the debt Americans are facing. Student loan debt in America is at $1.6 trillion and the average monthly student loan payment is between $200 and $300 per month, according to Student Loan Hero. Considering student debt, a bachelor's degree often doesn't pay off until about 15 years after graduation, according to a Grow analysis of Georgetown University data.

Along with graduating without debt, you might also earn more after graduating from an apprenticeship program compared to graduating with just an associate degree, says Robert Lerman of the Urban Institute.

For those who graduate from high school and community college, earnings go up significantly if they get an apprenticeship too, Lerman says. "We know that, from Washington State data, there was a recent study that compared people going into a manufacturing apprenticeships to similar people going to community college, the gains were far higher" for those who did the apprenticeships.

This is true across a number of fields, he adds: "Electricians do very well. High end plumbers do really well. There are increasingly numbers of IT computer-based apprenticeships coming online. There are a lot of good ones in manufacturing, advanced manufacturing, including maintenance positions."

Apprenticeship opportunities are expanding

Lawmakers across the aisle think it's smart to invest in apprenticeships, Jacoby says. "There is hardly a congressman who isn't for apprenticeships," she says. "Every state in the nation has some sort of law on the books of how to encourage it." The Obama administration spent $90 million to expand apprenticeships, and the Trump administration spent $95 million, according to reporting by CNBC.

Still, in 2019, there were only 633,476 apprenticeships in the country, according to data from the Department of Labor. While this number has steadily increased since 2011, it is a small fraction of the jobs available.

What we know is entering an apprenticeship versus entering a community college yields a higher earnings profile.
Robert Lerman
Urban Institute fellow

"For community college, the number of positions depends on how much the community college opens up classes," Lerman says. "To some extent, they can always open up more spaces just by virtue of expanding the college. Apprenticeships depend on the slots employers offer. Scaling people applying to college is easier than scaling employers offering apprenticeships."

Still, he says, employers benefit from offering apprenticeships as they often gain an employee who is trained and passionate about the specific position the company needs filled. "Apprenticeships emphasize a kind of occupational identity and pride in a particular field," he says. "You feel like you're part of a community."

And, Jacoby says, there is the obvious financial benefit for those who enter programs like FAME. Really, she says, apprenticeships are for "anyone who wants to save money."

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