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The Market for Undergraduate Nursing Education

October 7, 2015 Bob Atkins of Gray Associates

This is a guest post from Bob Atkins, founder and CEO of Gray Associatesa strategy consulting firm focused on higher education. 

Demand for nurses is growing.

A number of demographic trends suggest demand for nurses will continue to grow through 2022. These trends include increasing obesity, an aging population and improved access to health care. The Bureau of Labor Statistics (BLS) forecasts modest growth of 1.8% annually,1 but actual job postings for registered nurses are growing almost 10% annually.2

Will the nurses be there when we need them?

The answer will vary by degree level. The following analysis explores the likely balance of supply and demand for nurses with associate degrees (ADNs).

As you read this analysis, please remember that the Robert Wood Johnson Foundation Initiative on the Future of Nursing set a goal of 80% BSN-level nurses by 2020.3 This recommendation suggests a decline in the number of ADNs is desirable as they are encouraged to attain bachelor’s degrees in nursing.

Before we start, let’s look at what drives the number of future ADNs:

  • Joiners have to pass the NCLEX-RN exam; there are three groups of test–passers:
    • U.S.-based, first-time test-takers, who must complete a nursing program prior to taking the test
    • U.S.-based test-repeaters (people who failed the exam and took it again)
    • Foreign-trained professionals who take the exam to become U.S.-based nurses
  • Leavers fall into two groups:
    • People who retire or quit the profession (BLS calls this “replacement”)
    • Those who get a higher-level degree and move up, especially RN-to-BSN degree graduates

Each of these groups and their impact on the ADN population is reviewed below.

Nursing program completions are down.

Completions for ADNs grew approximately 2% in 2012 and 2013, before falling 0.4% in 2014.4

NCLEX-RN pass rates are down.

After completing their studies, ADNs must pass the NCLEX-RN exam before they can practice nursing. Since NCLEX test-scoring changed in April 2013, first-time pass rates for the NCLEX-RN exam have fallen from 89% to approximately 80%.5

Fewer associate-degreed, first-time, U.S.-based test takers are passing the NCLEX-RN.

The drop in pass rates lowered the number of people who passed the NCLEX-RN on their first try. In 2012, approximately 74,500 people passed the RCLEX-RN on their first attempt. In 2014, this number fell to approximately 68,500.6

Fortunately, first-time U.S. test passers are not the only source for new ADNs. Repeat test-takers and test-passers from overseas also add to the number of new ADNs. Repeat test passers have increased 54% since 2012. International passers have declined 15%. 5

The total number of associate-degreed test passers has declined.

Overall, the number of associate-degreed test-passers has declined slightly since 2012, from 87,665 to 84,886—a drop of 3.2%. In essence, the drop in first-time pass rates reduced the number of first-time passers, but it also increased the number of repeat test takers, leaving the overall number of associate-degreed passers about the same.

The number of ADNs is predicted to remain stable through 2022.

Looking at these trends, Gray Associates estimates the ADN workforce will remain stable for the next 10 years:

  • 2012 Base: In 2012, there were just over one million working nurses with ADN credentials
  • Leavers: 900,000 ADNs are likely to leave the ranks of ADNs by 2022
    • 200,000 will retire
    • 700,000 will complete RN-to-BSN programs
  • Joiners: 945,000 new ADNs will pass the NCLEX-RN by 2022
    • 787,000 are predicted to pass the NCLEX-RN exam on their first try
    • 158,000 will come from repeat test takers or foreign-trained nurses

As a result, we project an ADN workforce of about 1,046,000 in 2022 roughly the same number of ADNs we had in 2012. 7

If the number of ADNs does not grow, it poses a key challenge to nursing education — and nurses in general. Education institutions must produce more higher-level graduates to meet employer needs. The hope is that the number of BSN graduates and BSN nurses will grow fast enough to meet this need. Is this hope well founded? For nurses, the trends pose a considerable risk. If there aren’t enough ADNs, nurses with higher-level degrees may have to perform work now done by ADNs, possibly for ADN-level pay.


*ADN-level RN passers include: first-time, U.S.-educated ADN holders plus U.S.-educated repeats and internationally educated test passers (allocated based on award distribution in U.S.-based test passers). RN-to-BSN completers and RN passers are projected based on current trends in NCLEX and IPEDS completions.

1Bureau of Labor Statistics, U.S. Department of Labor, Employment Projections 2012-22.

2Gray Associates analysis of Wanted Analytics job postings data for SOC 29-1141; 2015 annualized based on actual January 2015-August 2015 data relative to prior-year data.

3The Future of Nursing: Leading Change, Advocating Health, 2010 report from the Robert Wood Johnson Foundation Initiative on the Future of Nursing at the Institute of Medicine (IOM), Recommendation.

4Gray Associates analysis of IPEDS completion data for CIPs 51.38xx for associates degree programs.

5National Council of State Boards of Nursing (NCSBN), NCLEX-RN 2012-2014 full-year national first-time pass rates for U.S.-educated graduates of associate degree programs.

6Gray Associates analysis on test completion.

7Gray Associates analysis on ADN workforce projection; the following data sources were used in calculations: BLS Employment Projection 2012-2022, Gray Associates IPEDS completion data for CIPs 51.38xx for associate degree programs (2009-2014) and Exam Statistics and Publications NCLEX pass rates 2009-2014. ADN-level RN passers include: first-time, U.S.-educated ADN holders, U.S.-educated repeat test takers and internationally educated test passers (allocated based on award distribution in U.S. test passers). RN-to-BSN completers and RN passers are projected based on current trends in NCLEX and IPEDS completions.

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