Helping Students Finish the 4-Year Run

September 08, 2009

Over the last 35 years, the United States has failed to build human capital at anything like its historic rate, and the Obama administration is wise in giving a high priority to an improvement in graduation rates. Our new book, Crossing the Finish Line: Completing College at America's Public Universities (Princeton University Press), examines the factors behind this plateau in educational attainment and the substantial (and closely related) disparities in bachelor's-degree completion rates by socioeconomic status, race, and ethnicity. Reducing these disparities is essential if the United States is to raise the overall level of educational attainment and regain its leadership in higher education worldwide.

We focus on America's public universities because they enroll such a high percentage of the college-going population—about two-thirds of all full-time students seeking B.A.'s and more than three-fourths of all students in four-year programs. This is also the sector that has the strongest historical commitment to promoting social mobility. We present data for all members of the 1999 entering cohorts at 21 flagship universities and at all 47 four-year public universities in four states: Maryland, North Carolina, Ohio, and Virginia. Here are six major findings:

1. Disparities in outcomes (especially graduation rates and the time it takes to earn a degree) are strongly related to socioeconomic status, race and ethnicity. The disparities are substantial, pervasive, and persistent (see Figure 1). Moreover, related differences in college preparation account for a relatively small part of the gaps.

2. Lengthy time-to-degree is a major problem. At the flagship campuses of public-university systems, just under half of entering freshmen go on to graduate in four years. Throughout the four state systems that we studied, less than 40 percent graduate in four years, and the number who take five and six years exceeds the number of four-year graduates. There is now debate over the desirability of promoting three-year programs; yet raising the percentage of students who graduate in four years would save far more resources and have a much greater impact on the "efficiency" of the educational system.

3. Withdrawals from flagship universities are far less concentrated in the first two years of study than many people assume. Nearly half of all students who withdraw do so after the second semester, so it will not do to focus only on getting students off to a good start—important as that is. Once again, there are substantial gaps among students from different socioeconomic groups, although the overall pattern is similar (see Figure 2).

4. Money matters. We find big gaps by family income in completion rates and in the time it takes to earn degrees—even after we control for related differences in factors like parental education. For example, at the flagships 83 percent of students from the top half of the income distribution graduate within six years, but only 68 percent from the bottom half do so: a difference of 15 percentage points. The difference in four-year graduation rates is 19 points. We also find that differences across states in the net prices paid by students have significant effects on the odds that a low-income student will graduate: the higher the net price, the lower the completion rate (other things equal). On the other hand, there is no correlation between net price and completion rates for high-income students, a finding that raises real questions about the wisdom of merit-aid programs and policies aimed at keeping tuition low across the board.

5. But money is by no means the entire story, perhaps not even the largest part. Student's choices of where to apply to college are enormously important. A surprisingly large number of students—especially those from poor families and those who are African-American or Hispanic—"undermatch." That is, they go to less demanding four-year institutions than they are qualified to attend, to two-year colleges, or to no college at all. For example, 59 percent of students in the bottom quartile of family income undermatch; 27 percent in the top quartile do so. In addition, 64 percent of students whose parents have no college education undermatch, compared with 41 percent of those whose parents have college degrees and 31 percent whose parents have graduate degrees (see Figure 3). Undermatching has serious consequences because there is a strong association between institutional selectivity and B.A.-completion rates: Students with essentially the same qualifications who attend more-selective universities have a considerably higher probability of graduating than do comparable students who attend less selective universities. Our data also confirm the results of other studies that show that students whose objective is to earn a B.A. are much less likely to do so if they start at a two-year college (again, other things equal).

6. "Sorting" of applicants by universities, especially overreliance on standardized tests, is consequential and problematic. We are not opposed to testing per se. Standardized tests can be helpful when used in the right ways and in the right settings. They are especially helpful when used with high-school grades to predict college grades at the most selective universities. It is clear, however, that high-school grades are far better predictors of graduation rates, especially at less selective universities. This finding holds even when we do not take account of differences in the quality of the high school that a student attended. Results of achievement tests, especially scores on Advanced Placement tests, are also good predictors. Both grades and achievement-test scores measure not only cognitive achievement but also coping and time-management skills—which, we surmise, affect completion rates.

Thus, in our view, institutions and national policy makers need to make stronger efforts to help students complete their college programs in a timely way. Starting college is obviously important, but so is crossing the finish line.

William G. Bowen is president emeritus of the Andrew W. Mellon Foundation and Princeton University. Matthew M. Chingos is a Ph.D. student in government at Harvard University and a research associate at the Mellon Foundation. Michael S. McPherson is president of the Spencer Foundation and a former president of Macalester College.