Last year, President Obama declared a national goal of having the highest percentage of college graduates in the world by 2020. The thinking is simple. With the pending Elementary and Secondary Education Act (ESEA) focusing on college readiness, new common core standards and assessments doing the same, and increased talk that a college degree is necessary for a good job, it only stands to reason that the number of Americans earning a college degree will increase over the next decade.
We’ve all seen the statistics on return on investment for a college degree. Those holding the sheepskin will earn (by most, but not all, estimates) nearly $1 million over a lifetime than those with just a high school diploma. That million dollars gets reinvested back into the economy. The circle of educational/economic life continues. It is no wonder that investment in higher education is seen as a win-win deal.
But what about those who enroll in college, but never complete a degree? Are we getting ROI for those who drop out of college, and never earn the degree? Are they paying back those loans that the U.S. Department of Education is so focused on these days? And what other costs are we bearing because of those who fail to finish that first lap of college?
The latter question is one that is being addressed in a new report released today by Mark Schneider, former commissioner of the National Center for Education Statistics (at ED) and current vice president at American Institutes for Research (an institution, in full disclosure, that Eduflack works with). In “Finishing the First Lap: The Cost of First-Year College Attrition in America’s Four-Year Colleges and Universities,” Dr. Schneider takes a look at the grant money (non loans) spent by the federal government, state governments, and individual institutions of higher education on first-year college students who do not return for their second year of college. And the numbers are startling.
Looking at the data available from the U.S. Department of Ed through its federal Integrated Postsecondary Education Data System (IPEDS), the only real data system the feds have for higher ed statistics, we see the 30 percent of first-year college students not returning for a second year accounted for $7.6 billion in grant money from state governments over a five-year period. Another $1.5 billion in federal grants were spent by the federal government. That’s more than $9 billion in aid that goes to students who barely spend enough time at college to learn their way around campus.
If we look at the numbers on a state-by-state basis, we expect to see the largest states on top of this of most dollars spent on first-year students who never return to college. And for the most part, we do. According to the AIR report, “13 states posted more than $200 million of state funds lost to students dropping out before the second year of college.”
The states include California ($467 million), Texas ($441 million), New York ($403 million), Illinois ($290 million), North Carolina ($285 million), Ohio ($277 million), Florida ($275 million), Indiana ($268 million), Michigan ($239 million), Georgia ($237 million); Louisiana ($213 million), Tennessee ($205 million) and Kentucky ($201 million).
What is one to do with this data? “Finishing the First Lap” is the first volley in a larger effort to educate policymakers and higher education officials on the financial impact of struggling higher ed completion rates. In conjunction with this report, Schneider is also launching College Measures, a new website that looks at grad rates and expenditure data for all 50 states and more than 1,500 individual IHEs. The website “allows users to evaluate the performance of colleges and state systems on a range of measures, including student progression and graduation rates, graduates’ ability to secure gainful employment, the efficiency and productivity of education-related expenditures, the cost of student attrition, and the amount of financial aid going to students who do not graduate.”
Will the site or the report provide all of the answers? Hardly. But together, they both ask some of the hard questions we need to ask if we are serious about boosting college graduation rates and ensuring our higher ed dollars are delivering real ROI. They also make clear that, as we focus on the need for better data systems and data usage in K-12, the same needs are even more acute in higher education.
One may not like the data or conclusions offered by Schneider, but they jumpstart an important discussion. The challenge before us is to take this discussion and move it to action. How do we take the data from sites like College Measures or Education Trust’s College Results and put it to use? What do state boards of higher education or state legislators do with the information? What do college presidents do with the data? And perhaps most importantly, how do consumers — students themselves — use the available data to make sure they are spending their hard-earned dollars on a higher education that is most likely to result in a degree and a well-paying job?