(via Third Way)
Suppose colleges performed as well as high schools. That’s right: high schools. According to our estimates based on federal data, just 57% of students who start two- and four-year colleges graduate. Students who take out loans to attend college but never finish are three times as likely to default, earn lower incomes throughout their lives, and have higher rates of unemployment. That leaves billions of taxpayers’ significant federal investment in higher education wasted.
What if rather than accepting these middling completion rates, we made a major push to increase the number of students leaving college with a degree in hand? Similar efforts in the K through 12 system increased high school graduation rates by 15 percentage points since the 1990s and to their highest levels to date. But college completion has been an afterthought.
In this paper, we calculated the micro- and macroeconomic benefits of raising college graduation rates from their current rate of 57% to the national high school graduation rate of 84% for a single class of students entering two- and four-year schools. This is not an unreasonable goal.
All college students have already demonstrated some academic success by earning a high school diploma, have been selected by a college through some form of an application process and more than half of college dropouts have at least two years of postsecondary education under their belts.
We estimate the benefit to the individual, as well as the economy, through metrics like increased employment, higher earnings, decreased likelihood of poverty and more. Of course, predictions are difficult, but indulging in this kind of thought experiment allows us all to imagine the kind of future our country could see if we make a collective effort to ensure more students who start college actually graduate with the degree they set out to obtain.
Among key findings, an 84% graduation rate for one class of students would:
- Increase employment by 107,400 for just this class
- Increase annual wages for 730,000 additional two-year degree holders by an average of $4,849
- Increase annual wages for 520,000 additional four-year degree holders by an average of $19,034
- Reduce the number of people in poverty by 48,000
- Over the course of their lifetimes increase the amount of local, state and federal tax revenue by more than $90 billion
Three decades ago, the federal government made a concerted effort to improve the outcome of high schools and it paid off. Today, college graduation rates resemble the high school graduation rates of past eras. A new push to get colleges to perform as well as high schools would benefit students, taxpayers and the broad economy by creating better opportunity for all Americans to earn a stable and secure life.