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| American Enterprise Institute
College completion is perhaps the most commonly used metric to gauge student success. Although the overall percentage of students that finish college has improved in recent years, the gain has not been substantial. In this report, Bridget Terry Long reviews some of the most recently available data and finds that there is substantial room for improvement at most of America’s colleges and universities. In 2016, the overall completion rate of full-time, first-time students was 49.1 percent at four-year institutions and 38.6 percent at two-year institutions. Notably, Long explores how completion rates vary by institution type, sector, student characteristics, and demographics.
The large non-completion problem at America’s colleges and universities represents significant costs for both students and taxpayers alike. Students experience costs in terms of receiving lower average earnings, having student debt, and losing time while enrolled in school. Additionally, this report highlights how students who fail to complete a college credential are less likely to go on to work in occupations that offer employment benefits (such as health insurance and pension plans), earn family-sustaining wages, or be civically involved. Taxpayers, on the other hand, collectively fund higher education to the tune of $130 billion every year, and each dropout represents wasted government subsidies on students who fail to complete their educations.
This report begins by surveying the existing data on college completion and reviews some of the specific strengths and shortfalls of each data source. Then, Long looks at the landscape of college completion in America, providing the most updated information on which types of institutions are successfully graduating most of their students and which are not. Lastly, the paper reviews what we know about student-level characteristics that are typically associated with college success and what else university leaders, educators, and policymakers might do to begin improving college completion rates in America.
—Rick Hess and Lanae Erickson Hatalsky
During the past half century, the United States has made tremendous progress in increasing access to postsecondary education. From 1960 to 2016, the percentage of recent high school graduates who went on to higher education increased from 45.1 percent to 69.8 percent.1 However, with the growing availability of data and increased ability to track students over time and across institutions, the country needs to do far better at supporting college student persistence and success. The conventional way to measure graduation rates is to examine how many students complete a degree within 150 percent of the expected completion time—that is, six years for a bachelor’s degree and three years for an associate degree. Using this metric, research suggests that about only half of students enrolled at four-year colleges and universities graduate within 150 percent of the expected completion time, and the completion rate is even lower for students enrolled at two-year colleges.2
Given that the goal of higher education for most students is to complete a degree or credential that is worthwhile in the labor market, the low levels of completion are disconcerting, and both students and society at large experience high costs due to non-completion. Increasingly, there are examples in which the tuition and fees college students pay, as well as the opportunity costs of enrollment, are not justified by the meager returns experienced by students, especially those who leave higher education before completing their program. Further, for taxpayers, investments in students through institutional subsidies and financial aid sometimes do not translate into higher educational attainment and the expected increases in tax revenue, reductions in government dependency, and other social benefits. The college completion problem is large and has serious implications for many aspects of our society and country.
College completion is only one of many possible ways to gauge student postsecondary success. Students, families, and researchers would like to know more than just whether students finished their program or degree requirements—measures of student learning or a sense of the quality of the degree would be ideal, and there are continual efforts within higher education to establish such assessments and indicators.3 In addition, the conversation about college completion increasingly has focused on “credentials of value,” attempting to discern whether the degree or certificate completed results in a wage that is sufficient to pay back student loans and live at a reasonable standard of living. Although these additional measures and nuances are vitally important to understanding how well students are doing, my analysis centers on the most common measure of student success: college completion.4
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