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Trusteeship Magazine

Crossing the Finish Line: Completing College at America's Public Universities

By William G. Bowen, Matthew M. Chingos, and Michael S. McPherson
November/December
2009
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In order to raise college graduation rates, ways must be found to bridge the disparities in educational outcomes associated with socioeconomic status and race and ethnicity.

Compelling evidence exists that surprisingly large numbers of students, particularly those from low socioeconomic backgrounds, "undermatch" when they do enroll in college—going to less-demanding institutions than they appear academically qualified to attend.

The "net price" (tuition minus in-state grant aid) paid by students from low socioeconomic groups matters greatly to their college retention rates, while the authors' study found no evidence that it matters at all to graduation rates for students in the upper half of the income distribution.

Our study of 21 flagship public universities and four entire state systems (in Maryland, North Carolina, Ohio, and Virginia), published recently by Princeton University Press under the title above, demonstrates that if this country is to regain its leadership in higher education, it must fix two interwoven problems: (1) the stagnant level of overall educational attainment, as measured by baccalaureate completion rates that hover around 30 percent, and (2) the huge disparities in educational outcomes associated with socioeconomic status (SES) and race and ethnicity.

As Figure 1 shows, for the nation as a whole, the baccalaureate completion rate ranges from 9 percent for low-SES families where neither parent completed college to 68 percent among high-SES families with at least one parent who is a college graduate. At the flagship universities we studied, fewer than half of the first-time freshmen in the 1999 entering cohorts graduated in four years, and just over three-quarters graduated from these leading universities within six years. The six-year baccalaureate completion rate was fully 14 percentage points higher for students from high-SES families than for students from low-SES families, and this gap is reduced by only 3 percentage points when we control for differences in entering characteristics (SAT/ACT scores, high-school grades). African-American and Hispanic students—especially men—have much lower completion rates than white and Asian students.


It is evident that to raise the overall educational attainment rate—a key objective of the Obama administration and one that is more and more widely shared across society—we must find ways to graduate larger numbers of students from low-SES backgrounds and from the burgeoning Hispanic population. Improving graduation rates for students from the traditionally more successful population of affluent white students is not going to do the job. Even if focusing on this privileged group were the responsible thing to do, that group is just not large enough. We have here, then, an instance in which concerns for equal opportunity (social mobility) and the need to increase the country's stock of human capital (to be competitive in the world) go hand-in-hand. We can't have one without the other.

The long time students take to earn degrees is also a major problem. At the universities we studied that belong to state systems, more than half of the students who eventually graduated took more than four years. It is ironic that people are now debating whether three-year degree programs should be promoted, when raising the fraction of students who graduate in four years would save far more resources and have a far greater impact on the "efficiency" of the educational system. Moreover, as Figure 2 shows, the dropout phenomenon is by no means eliminated by getting students past the first year; even students who have completed two or three years of college continue to drop out before they reach the finish line.



Our book analyzes in detail the forces behind these sobering disparities in overall bachelor's completion rates and the long time-to-degree. We believe that our findings can be helpful to a variety of actors who are concerned about college success, including federal and state policy makers, school superintendents, and high-school principals, as well as parents and students themselves. But clearly those who oversee and lead the nation's public universities—boards of trustees and presidents and chancellors—have special reason to focus on evidence that may help them improve graduation rates. As we review here several of the main lessons from this extensive study, we will pay special attention to the key role universities and their leaders can play.

Continued improvement in primary and secondary schooling is clearly needed. Still, taking pre-college preparation "as is," we find that two kinds of "sorting" of students among universities matter greatly in determining completion rates: (1) sorting done by students and their parents in deciding where to apply to college; and (2) sorting by universities in deciding which applicants to admit.

There is compelling evidence that surprisingly large numbers of students, and especially students from low-SES backgrounds, "undermatch"—they go to less-demanding four-year institutions than they are presumptively qualified to attend, to two-year colleges, or to no college at all. Figure 3 shows that such undermatching is quite prevalent and is heavily concentrated among students with low levels of parental education and income. Such pronounced undermatching has major consequences for completion rates, because there is a very strong association between the selectivity ("quality"?) of the institutions attended and their graduation rates—even after controlling for differences in the entering credentials of students. This key finding may appear counterintuitive, since one might expect a student to be more likely to graduate from an "easier" institution with less-competitive admissions standards. But the evidence is clear that factors like stronger peers and higher graduation expectations reward students who challenge themselves by attending strong institutions.



We also find that starting at a two-year college reduces significantly the chances that a student will ever earn a bachelor's degree, even among students who enter aiming for a four-year degree. Community colleges are important institutions, and they provide much-needed services to both recent high-school graduates and older adults, including many whose goals do not include attaining a bachelor's. But it is simply unfair to expect community colleges to solve the nation's problem of inadequate attainment of bachelor's degrees.

One key to addressing the undermatching problem is finding ways to guide, in a constructive direction, high-school students' decisions about where to apply. High schools, we think, need to play a role here by investing in resources, training, and personnel to provide low-SES students and their parents with better, more timely, and more persuasive advice about their college options and the significance of the choice of where to attend. A simpler student-aid system and better communication about what good colleges will really cost a family—often less than they suppose—can help, too.

Further, selective public universities can help by simplifying their own application processes, making it effortless for needy students to obtain waivers of application fees, and by making their campuses genuinely open to and supportive of students from a variety of backgrounds. At least as important, universities should cooperate to develop joint programs of outreach and information for first-generation college families and others who need help. It is much more efficient for a whole group of institutions to reach out to promising low-SES students than it is for each individual institution to go out and try to "sell" students on the virtues of its own campus. This kind of cooperative effort is a place where trustees' leadership could make a huge difference.

The other aspect of the sorting problem—universities' own admissions decisions—results in part from an over-reliance by some colleges and universities on "aptitude" tests in deciding which students to admit. We are not against testing, which, when used in the right ways and in the right settings, can be very helpful. But the evidence is clear that high-school grades are far stronger than aptitude-test scores as predictors of graduation rates, especially at less-selective universities. Results of achievement tests, and especially scores on advanced-placement tests, are also good predictors. Good high-school grades not only provide evidence of students' subject-matter knowledge, but they also identify students who are disciplined and goal-oriented. Moreover, we do not find that variations among high schools in quality and grading standards are so large as to make the high-school GPA a meaningless measure: Even when we do not adjust our data at all for differences across high schools, GPA substantially outperforms test scores in predicting graduation rates.

We worry that sometimes university leaders focus too much on prestige and their rankings in outside ratings systems in setting their admissions practices—and not enough on designing admissions policies that will do the most to achieve key university goals such as improved graduation rates and greater diversity. Here again, university trustees are in a strong position to encourage presidents and admissions officials to keep their focus on what really matters—by asking questions about institutions' goals in these areas, strategies for achieving them, and by seeking regular progress reports.

The last policy area we address here is money, in the form of prices and student aid. Everywhere we look in our study, we see evidence of the influence of families' economic status on their children's educational prospects. Many of the effects of living in relatively disadvantaged conditions are evident well before college, including lower grades and test scores, lower likelihood of entering college, and the like. Yet even after we control for all these pre-college characteristics of students, we find that lower-income students who do matriculate are less likely to complete college at all, much less to graduate on time.

Our evidence indicates that universities' pricing and student-aid policies play an important role in producing this unfortunate result. Focusing on our flagship universities, we estimated the "net price" paid by students from different family income groups, where by net price we mean the tuition price less the average amount of grant aid that in-state students in that income group receive. We then compared the graduation rates for students attending flagships that have different net prices, while controlling for differences in other characteristics of these students, including their grades and test scores.

Our findings carry two important messages. First, for students from the bottom half of the income distribution, net price really matters. Figure 4 shows this relationship for students whose families are in the bottom quartile of the income distribution: The higher the net price, the lower the four-year graduation rate. (Note that for most low-income, in-state students, the net price is negative, because grants are large enough to cover tuition with something left over to help with living costs. The more assistance available for living costs, the higher the graduation rate.)The relationship is similar, but weaker, for students in the second quartile for both their four- and six-year graduation rates.



Just as important as the significant relationship between net price and graduation that we see for low- and moderate-income students is the fact that we find no evidence in our study that net price matters at all to the graduation rate (four-year or six-year) for students in the upper half of the income distribution. Figure 5 shows this result for students in the top income quartile.


Taken together, these two results imply that targeting financial help on students who really need it is a viable strategy for raising graduation rates. Reducing the tuition rate across the board lowers the price for everybody, but it is wasteful in terms of raising graduation rates because much of the price cutting benefits students whose behavior is unaffected by it. Targeting financial aid on those who need it improves their graduation results while not forgoing tuition revenue from those whose completion rates will not be influenced by a price cut.

The College Board's Trends in Student Aid reports that in 2006-07, 40 percent of all the student aid that public four-year colleges and universities awarded to students from their own resources went to students who did not have financial need—much of it in the form of "merit" scholarships—while just 44 percent went to students who did have need. (The remaining grant aid went to athletes, some of whom had need.) Redirecting this non-need aid to students who actually need it could, we think, raise graduation rates without increasing the overall cost of aid to the institution.

Many other reforms and changes at public universities have the potential to raise graduation rates. An important step for boards and administrators of universities and state systems is to make deliberate efforts to try promising ideas and—crucially—to assess the results of their attempts and share the findings (whether they succeed or fail). The more general need is for universities to keep a focus on the problem of improving graduation rates. Paying consistent attention to any goal is usually key to making progress, which often requires multiple strategies employed simultaneously, in part so as to learn which ones might be most effective.

Perhaps the greatest service that boards can provide to the universities they guide is simply this: paying consistent attention to outcomes that matter.

Questions Boards Might Ask of Administrators

 

  • Identify three key steps the university can undertake to raise the graduation rate.
  • How can the college/university ensure that standards are not compromised as you move more people toward graduation?
  • Who in the organization has primary responsibility for improving the graduation rate?
  • What percentage of graduates complete baccalaureates in four years? What would be the savings to the system/institution and to families from increasing the rate of four-year completions?
  • Provide an analysis of the institution's commitment to financial aid for undergraduates, including the distribution of grant aid to students from different income groups, the proportions of grant aid awarded on the basis of need or the basis of merit, and the average educational debt burden of undergraduates by income group.
  • Please identify institutions (public or private) in your region with which you could work in forging a cooperative arrangement for outreach to able students from disadvantaged backgrounds—and let us know how the board can help make it work.
  • How can the institution strengthen its capacity to undertake and to assess the effectiveness of innovations designed to raise graduation rates?
  • How much weight does the institution put on high-school grades versus SAT/ACT scores in the admissions process? We would like to see the results of a rigorous study examining how well these measures predict graduation rates and college grades at this institution.
  • It is hard to compare graduation rates across universities because the qualifications of entering students may vary so much. But what are the graduation rates for students whom you judge to be adequately or well prepared? How do they compare to graduation rates for comparable students at other universities?

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TAKUYA MATSUNAGA/GETTY IMAGES
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