The Problem of College Completion Rates

The Problem of College Completion Rates

Timothy Taylor 30/06/2018 4

There's one event that very often turns college enrollment into a poor financial decision with a negative payoff: not completing a degree. Then that happens, the student has spent both money and some years of time in a program that not only offers little financial payoff, but may also leave them saddled with student loans to repay for years to come. More broadly, society's investment in higher education isn't paying off. Two DC think-tanks, ThirdWay and the American Enterprise Institute, have published a set of five readable papers on the subject:

Bridget Terry Long offers a nice overview of the problem she writes:

"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."

Here's a table from her paper showing college completion rates across different types of institujtions by this measure.

Sarah Turner's essay offers some additional in-depth background. On the  horizontal axis, these graphs show spending per student. On the vertical axis, they show completion rates (again, as measured by completing a degree within 150% of the expected time) Each dot is a college or university. The central insight is that there is a very wide range of completion rates across schools in the same category that spend much the same amount per student.

Turner writes:

"In 43 four-year public schools, the three-year cohort default rate is greater than the completion rate. This is also the case for 147 four-year private nonprofit schools and 98 for-profit schools. In other words, students in these schools who borrow face a greater likelihood of defaulting than completing a degree. It would seem, then, that college attendance at these schools leaves many students worse off—lacking a degree, defaulting on a student loan, or both."

The papers tend to be stronger on describing the problem than on providing clearly workable solutions, but that's the nature of this issue. College completion rates have been low for a long time, but with the cost of college now having climbed so very high, the issue has a new relevance. For example, Destin looks at how improvements in the psychological environment at a school, including elements of teaching and campus life, can help. Chingos emphasizes that students need preparation to be ready to do college-level work. Turner discusses the pros and cons of linking college completion rates and the levels of state support and financial aid.  Schneider and Clark summarize reforms that have improve completion rates at certain schools. 

One challenge here is to remember that the ultimate goal isn't to punish schools with low completion rates (although that may be necessary in some cases). It's to have fewer students falling off the path to college completion. 

A version of this article first appeared on Conversable Economist.

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  • Scotty Jones

    Far too many students invest scarce time and money pursuing a degree they never finish.

  • Thomas Townsend

    If colleges are admitting qualified students and then passively watching them drop out along the way, that’s a problem......

  • Luke Biksas

    By 2020, America will once again have the highest proportion of college graduates in the world.

  • Steve Tapscott

    In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity, it is a prerequisite.

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Timothy Taylor

Global Economy Expert

Timothy Taylor is an American economist. He is managing editor of the Journal of Economic Perspectives, a quarterly academic journal produced at Macalester College and published by the American Economic Association. Taylor received his Bachelor of Arts degree from Haverford College and a master's degree in economics from Stanford University. At Stanford, he was winner of the award for excellent teaching in a large class (more than 30 students) given by the Associated Students of Stanford University. At Minnesota, he was named a Distinguished Lecturer by the Department of Economics and voted Teacher of the Year by the master's degree students at the Hubert H. Humphrey Institute of Public Affairs. Taylor has been a guest speaker for groups of teachers of high school economics, visiting diplomats from eastern Europe, talk-radio shows, and community groups. From 1989 to 1997, Professor Taylor wrote an economics opinion column for the San Jose Mercury-News. He has published multiple lectures on economics through The Teaching Company. With Rudolph Penner and Isabel Sawhill, he is co-author of Updating America's Social Contract (2000), whose first chapter provided an early radical centrist perspective, "An Agenda for the Radical Middle". Taylor is also the author of The Instant Economist: Everything You Need to Know About How the Economy Works, published by the Penguin Group in 2012. The fourth edition of Taylor's Principles of Economics textbook was published by Textbook Media in 2017.


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