The concept of the associate degree is new to the Hong Kong tertiary education system. Public discussion and research have focused much on the policy and operational aspects of this tier, but empirical efforts to examine associate degree students' learning experiences and how it relates to the policy are relatively sparse. The present study characterised Hong Kong associate degree students' learning experiences in this new tier of tertiary education from the light of human capital theory using qualitative methods. Thirty-five students forming 11 focus groups participated in the study. The focus group interview was exploratory and semi-structured, inviting the students to discuss their transition experiences. Three themes were grounded on the data: 1) Inferior identity; 2) Dual purposes of associate degree; and 3) Intense competition and stress. The present finding regarding associate degree students' learning experience yields implications on policy-making; specifically on the provision of financial support to minimise the cost incurred and broadening of admission in order to make this tier an integral part of the tertiary education system in Hong Kong to promote public perception of economic gain. Copyright © 2019 Informa UK Limited, trading as Taylor & Francis Group.