Lane Kenworthy, The Good Society
For the past century, America’s colleges and universities have been the envy of the world. That’s still true when it comes to research, but it’s no longer clear that we’re doing as well as we should in educating our young adults.
Do enough Americans get a four-year college degree? How much do college students learn? Are we doing well by students who attend college but don’t end up getting a four-year degree? Are we making progress in facilitating lifelong learning?
GETTING A FOUR-YEAR DEGREE
About 35% of Americans get a four-year (bachelor’s or equivalent) college degree. As figure 1 shows, the share has risen steadily since 1950, when it was just 5%. There was a brief spike beginning in the late 1960s, due partly to a big increase in public funding for colleges after the Soviet Union successfully put its Sputnik satellite rocket into space and partly to the instatement of a military draft for the Vietnam War. But the share returned to its long-run trend shortly afterward.
Our rate of college completion puts us in the middle of the pack among the world’s rich democratic nations, as figure 2 shows. That’s a significant change from several decades ago, when we stood above all but one other country. College completion has been increasing more rapidly in many other countries than it has here.
So compared to the past and to other affluent nations, we’re doing okay on college completion — not badly, but perhaps not as well as we’d like.
A better-educated population tends to have a range of beneficial effects for the society as a whole.1 For individuals, a college education can aid in the development of general skills such as complex reasoning, critical thinking, and written and verbal communication. In this way, colleges help people to maximize their capability to make and pursue informed preferences. And college remains a very good financial investment. The average difference in earnings between a person with a four-year college degree and a person with the next highest degree, an associates degree, is about $17,000 a year.2 Multiplying that by the 40 years of a typical work career yields a lifetime earnings gain of about $680,000, which is more than double the $300,000 four-year cost of the most expensive US colleges.
Some contend that it makes no sense to try to increase college completion. In this view, there is a limited supply of high-skill jobs, so adding more college graduates will leave more in jobs that don’t require anything near college-level abilities.3 But careful assessment of the available evidence suggests that demand for college-level skills is likely to increase going forward.4
More worrisome than the overall rate of college completion is the large and widening gap among Americans from varying backgrounds. Figure 3 shows the trend in graduation by parents’ income. College completion has increased for all income groups, but much less rapidly among those with low-income parents than among those with upper-middle-income or high-income parents.
What’s caused this widening of the income gap in college completion? Much of it owes, arguably, to rising gaps in family circumstances, neighborhoods, early education, and K-12 schools.5
But colleges themselves may be partly to blame. One possible culprit is that public four-year colleges haven’t expanded their admissions slots nearly enough to accommodate the growing applicant pool. At these colleges, students with weaker credentials, whose admission applications now frequently are rejected, tend to be just as likely to graduate as those with stronger applications. This suggests that admitting more students from disadvantaged backgrounds to public four-year colleges would increase the number who get a four-year degree.6
Another leading hypothesis points to the rising price of college. As figure 4 shows, the average published price for public four-year colleges has ballooned over the past generation. (At private nonprofit colleges, not shown here, it has risen even more sharply, from $18,000 in 1971 to $49,000 in 2018.) Various accounts attribute this to reduced funding by state governments, increases in the number of administrators and in administrative salaries, and an increase in the ability and willingness of affluent parents to pay hefty sums.7
Yet these data give a misleading picture of the true price of college for students from low-income and lower-middle-income families, because many receive grant aid from the federal government and/or the college they attend. Figure 5 shows the average amount actually paid by students and their parents. These data are available only beginning in 1990, but that’s not a big problem, as it’s since then that the sticker price of college has increased most sharply. The average amount actually paid has increased, but a good bit less than the published price.
Figure 6 goes farther and shows the price actually paid by families at different income levels. (These data are available only for 1999 to 2011.) For students whose parents’ income is on the top quarter of the income ladder (Q4), the rise in actual price has been similar to the rise in published price shown in figure 4. But for students from lower-middle-income (Q2) families and especially those from low-income (Q1) families, the rise has been far less steep — indeed, it has been fairly small.
Many Americans seem to think college prices have been rising as depicted in figure 4 — very rapidly. But this picture is misleading in two respects. First, colleges’ operating costs have increased far less rapidly than what we see in figure 4. Indeed, according to two recent studies, they’ve risen about as much as we would expect for a service industry that has a large number of highly-educated employees.8 Second, as we’ve just seen, college pricing has increasingly operated with distinct tiers. Students from high-income families often pay the full sticker price, but students from lower-income families tend to pay significantly less because they receive financial aid and/or federal grants. This gives us reason to question the importance of price as a barrier to college for Americans from less-advantaged backgrounds.
Then again, many low-income students, and their parents, may not be aware of the extensive financial aid for which they are eligible, so they may perceive the price of college to be much higher than it actually is.9 The fact that colleges have tended to make it difficult to figure out the amount of available financial aid probably contributes to this.10
One indicator that perceived price is a key factor is that the gap in college completion owes mostly to a gap in entry. Figure 7 shows rates of entry and completion by parents’ income for Americans born around 1980. The large gap in completion is already present in entry. Also, the college entry rate for high-performing students from low-income families is much lower than for high-performing students from high-income families.11
According to the data in figure 6 above, between 1999 and 2011 the actual net yearly price of attending a public four-year college increased by about $2,000 for students from a household in the lowest income quartile and about $3,000 for students from a household in the lower-middle quartile. Research over the past three decades on the impact of price on college entry suggests that an increase of $1,000 in price reduces entry by three to five percentage points.12 If this estimate is correct, the increased price of college, though seemingly not that large, could account for much of the lag in college entry and completion among students from lower-income backgrounds over the past generation.
Another suggestive piece of evidence on the impact of college price comes from cross-country comparison. In Denmark, Finland, Norway, and Sweden, attending a four-year public university is free, and in those countries the odds that a person whose parents didn’t complete high school will attend college are between 40% and 60%, compared to just 30% in the United States.13
In 2018, the University of Michigan told a randomly-selected group of low-income high school students that the university would be “tuition-free” for them. Students receiving this message were about twice as likely to apply and enroll as other comparable high school students, even though these other students also would have paid no tuition because of federal grants and the university’s financial aid programs.14
If high prices are a deterrent, it might not be only at the entry point. One recent study finds that for about 40% of students who attend public universities, the price to the student or their parents rises from one year to the next. The median amount of increase is $1,200. This owes partly to increases in tuition, fees, or room and board, partly to changes in families’ financial circumstances, and partly to colleges’ practice of offering more financial aid to students in their first year than in subsequent years.15
Some have hoped that the rise of for-profit colleges would restrain price growth by providing new low-price competitors to traditional public and private nonprofit colleges. But so far their impact has been far less benign. Much of the rise in student loan debt delinquency and default since the early 2000s is among students who attended for-profit colleges.16
More helpful might be the availability of income-based repayment of student loans, a program begun in the late 1990s and significantly enhanced in 2007 and 2010. For students who borrow from the federal government, the amount paid back after college is lower if income turns out to be low. Kevin Carey highlights the potential impact17:
“Take, for example, someone who finishes a bachelor’s degree with the national average of $29,000 in debt, and borrows another $13,000 for a master’s degree in education. The new graduate goes to work as a schoolteacher at a starting salary of $35,000, which grows to $50,000 after 10 years. Under IBR [income-based repayment], the monthly loan payment will start at $117 and never rise above $200. The teacher will pay only $18,360 in total on the loans, and $48,840 in principal and accumulated interest will be forgiven after 10 years.”
What’s the case for doubting the importance of the price of college as a deterrent to entry and completion by students from low- or lower-middle-income families? One important piece of evidence, already noted, is that the actual price of attending an in-state public college has increased so little for such students. Another is the finding of a recent study that looked at changes in the price of public universities between 1990 and 2013 and observed little impact on college enrollment or completion.18
Another likely obstacle to college entry is the application process, from identifying target colleges to taking admission tests (the SAT or ACT) to filling out applications and financial aid forms to completing post-admission paperwork. Some students lack information; others are overwhelmed by the array of options and the volume of work required to apply; and still others lack the organization or persistence to successfully navigate the process from start to finish.19 Trial programs that provide assistance to such students show promise at increasing entry rates and improving the quality of schools entered.20
While low rates of college completion by Americans from low- and lower-middle-income families owe mainly to low rates of entry, that isn’t the only problem. Some students who do enter college are inadequately prepared. The most common strategy for addressing deficiencies in college preparation has been to have students take remedial courses, but research has tended to find little or no beneficial impact.21 Newer strategies include eschewing remedial classes and providing intensive counseling and monitoring.22
How effective are American colleges at educating their students?
Some indicators suggest they are fairly effective. According to international comparisons, the United States continues to be among the world’s leaders in innovation and technological advance.23 American universities play a key role in this success, both indirectly via their graduates and directly via their research. Many innovations, innovative firms, and innovative clusters are based around or tied to universities. American colleges also continue to be the leading choice of students from developing nations wishing to attend a rich-country university.
Other indicators suggest reason for concern. Figure 8 shows the distribution of college students by the six-year graduation rate at the college they attend. Among those at a four-year public college, just 38% attend one that has a graduation rate of 60% or better. And that’s true of 56% of those at a private nonprofit four-year college.
More direct evidence comes from Richard Arum and Josipa Roksa, who administered an assessment of critical thinking, complex reasoning, and writing skills to several thousand students at two dozen American universities when the students entered and at the end of their second and fourth years. They found little progress on average, and no progress at all for about a third of the students.24
In 2012, the Organization for Economic Cooperation and Development (OECD) conducted a “Survey of Adult Skills” to measure individuals’ proficiency in using digital technology, communication tools, and networks to acquire and evaluate information, communicate with others, and solve problems. Figure 9 shows the share of adults with a tertiary degree that have “good” problem-solving skills by spending on tertiary education as a share of GDP. Here too the news isn’t good. On average, the share of college-educated Americans with good skills is below that in many other affluent nations. And when we take into account America’s comparatively heavy expenditure on college education, our average skill level looks quite bad.
To the extent this is a real problem, there are quite a few possible culprits, including colleges’ heavy reliance on adjunct faculty and graduate students for teaching; the priority of research over teaching in determining faculty tenure and pay; the importance of student evaluations in assessing teaching performance, which encourages soft grading; and the extensive comparison shopping by college applicants, which leads to more money spent on campus beautification, athletic facilities, dorms, and other nonacademic accoutrements.
New technology and new teaching strategies might help. Lectures and short instructional videos by experts in content and in delivery can now be shown to students for free or at low cost. Although massive open online courses (MOOCs) have thus far failed to live up to proponents’ hopes, greater use of this technology has the potential to improve student learning.25 That’s also true of active learning approaches to teaching, which replace or supplement the traditional lecture with greater student involvement.26
Another possibility is to shift away from degrees based on student completion of a certain number of credit hours to competency-based degrees.27
Are we also preparing college students for the “wrong” careers? Put another way, are we preparing too few of them with the skills needed for jobs that are critical to our economic success and improvements in living standards? The most common worry here has to do with STEM fields (science, technology, engineering, and math).28 However, there’s little indication of a coming shortage of skills for the jobs employers are projected to seek. There are some potential exceptions — engineers and primary-care physicians, for example — but these can be remedied by loosening restrictions imposed by professional associations and/or allowing more skilled immigrants.
THE “OTHER THIRD”
One-third of each cohort in the United States never enter college. Another third get a four-year college degree. What about the other third who enter college but don’t get a four-year degree? Are we serving them well?
Many in this group begin at community college. Among them, 80% say they plan to get a four-year degree. But just 33% ever transfer to a four-year program, and only about 40% of those who do transfer end up getting a four-year degree. So just 15% of Americans who begin at community college go on to complete a four-year degree.29
According to a recent study by Public Agenda and partners, low income doesn’t seem to be the main barrier here.30 A bigger problem is the degree to which four-year colleges facilitate transfer. Students who can transfer 90% or more of their community college credits are about three times more likely to transfer and get a bachelor’s degree than those who can’t, but only 40% of community college students are able to do this.31
Some students who attend community college get a two-year associate degree, and 33% get a one-year certificate. According to calculations by James Rosenbaum and Janet Rosenbaum, compared to persons who finish high school on time but never enter college, Americans with an associate degree earn 22% more and those with a certificate earn 13% more, whereas those with some college but no certificate or degree get no earnings advantage.32 One possible implication, Rosenbaum and Rosenbaum suggest, is that instead of pushing all community college students toward four-year colleges, which leads some of them to end up with no degree or credential at all, we should embrace the credential and associate degree routes.
Traditionally, college education has been something people pursue at a particular point in the life course — during the late teens and early twenties. Going forward, this is likely to change. More of us will want to switch careers in midlife, and for some that will entail more college coursework, perhaps even an entire degree program. In addition, more retirees are likely to want to be in or near an active learning environment.33
This suggests that colleges ought to pursue the integration of “nontraditional” students. Some have begun to do so, often through “extension” programs, but this process is only in its infancy. And it’s worth noting that the share of college students who are older than 25 hasn’t increased in recent decades, as figure 10 shows.
The share of Americans getting a four-year college degree has increased fairly steadily since 1950, though in the past decade it has been rising even faster in a number of other rich nations. The gap in college completion between Americans from more advantaged backgrounds and those from less advantaged backgrounds is large and growing. Changes in our economy and society have contributed to this, but so too, it appears, have public universities’ increasing price and their failure to expand admissions to meet rising demand.
There also is reason for concern about the quality of college education. The best available data suggest that many students’ learning and skill development is below what we would wish, and perhaps below that of other affluent countries. But these data are limited, so much more study is needed here.
About a third of a typical cohort begin college but don’t end up getting a four-year degree. The key concern is for individuals who end up with no degree or certificate at all. One key to improvement is making it easier to transfer credits from community colleges to four-year institutions. Another is ensuring that those unwilling or unable to pursue a four-year degree get either a two-year associate degree or a one-year certificate.
In coming decades, more people beyond their mid-twenties, including retirees, will want to pursue some formal postsecondary education. Colleges are well-positioned to become the key venue for lifelong learning, and they are beginning to move in this direction.
The appendix has additional data.
- Lane Kenworthy, “What Good Is Education?,” The Good Society. ↩
- Kenworthy, “What Good Is Education?” ↩
- Charles Murray, Real Education, Random House, 2009; Richard Vedder, Christopher Denhart, Matthew Denhart, Christopher Matgouranis, and Jonathan Robe, “From Wall Street to Wal-Mart: Why College Graduates Are Not Getting Good Jobs,” Center for College Affordability, 2010. ↩
- Paul Osterman, “College for All? The Labor Market for College-Educated Workers,” Center for American Progress, 2008; William G. Bowen, Matthew M. Chingos, and Michael S. McPherson, Crossing the Finish Line: Completing College at America’s Public Universities, Princeton University Press, 2009; National Commission on Higher Education Attainment, “An Open Letter to College and University Leaders: College Completion Must Be Our Priority,” American Council on Education, 2013. ↩
- Lane Kenworthy, “Equality of Opportunity,” The Good Society. ↩
- Michael Hout, “Rationing College Opportunity,” The American Prospect, 2009; Joshua Goodman, Michael Hurwitz, and Jonathan Smith, “College Access, Initial College Choice, and Degree Completion,” Working Paper 20996, National Bureau of Economic Research, 2015; David L. Kirp, “A New Way to Improve College Enrollment,” New York Times, 2015. ↩
- Christopher Jencks, “The Graduation Gap,” The American Prospect, 2009; Benjamin Ginsburg, “Administrators Ate My Tuition,” Washington Monthly, 2011; Catherine B. Hill, “Higher Education’s Biggest Challenge Is Income Inequality,” Washington Post, September 6, 2013; Suzanne Mettler, “How U.S. Higher Education Promotes Inequality, and What Can Be Done to Broaden Access and Graduation,” Scholars Strategy Network, 2014; College Board, “Trends in College Pricing 2015.” ↩
- Robert B. Archibald and David H. Feldman, The Road Ahead for America’s Colleges and Universities, Oxford University Press, 2017; Eric Helland and Alex Tabarrok, Why Are the Prices so D*mn High? Health, Education, and the Baumol Effect, Mercatus Center, 2019. ↩
- Eric P. Bettinger, Bridget Terry Long, Philip Oreopoulos, and Lisa Sanbonmatsu, “The Role of Simplification and Information in College Decisions: Results from the H&R Block FAFSA Experiment,” Working Paper 15361, National Bureau of Economic Research, 2009; Bowen, Chingos, and McPherson, Crossing the Finish Line, ch. 8; Susan Dynarski and Judith Scott-Clayton, “Financial Aid Policy: Lessons from Research,” Working Paper 18710, National Bureau of Economic Research, 2013; Lindsay C. Page and Judith Scott-Clayton, “Improving College Access in the United States: Barriers and Policy Responses,” Working Paper 21781, National Bureau of Economic Research, 2015; Phillip B. Levine, Jennifer Ma, and Lauren C. Russell, “Do College Applicants Respond to Changes in Sticker Prices Even When They Don’t Matter?,” Working Paper 26910, National Bureau of Economic Research, 2020. ↩
- Jim Marcus, “Confusing College Financial-Aid Letters Leave Students, Parents Adrift,” Hechinger Report, 2015; Ron Lieber, “Concealing the Calculus of Higher Education,” New York Times, 2016. ↩
- Suzanne Mettler, Degrees of Inequality, Basic Books, 2014. ↩
- David Deming and Susan Dynarski, “Into College, Out of Poverty? Policies to Increase the Postsecondary Attainment of the Poor,” Working Paper 15387, National Bureau of Economic Research, 2009; Page and Scott-Clayton, “Improving College Access in the United States,” pp. 8-9. ↩
- OECD, Education at a Glance 2010, table B5.1; OECD, “Country Note: United States,” Education at a Glance 2012. ↩
- Susan Dynarski, C.J. Libassi, Katherine Michelmore, and Stephanie Owen, “Closing the Gap: The Effect of a Targeted, Tuition-Free Promise on College Choices of High-Achieving, Low-Income Students,” Working Paper 25349, National Bureau of Economic Research, 2018. ↩
- Sara Goldrick-Rab and Nancy Kendall, “The Real Price of College,” Century Foundation, 2016, using Wisconsin Scholars Longitudinal Study data. ↩
- Adam Looney and Constantine Yannelis, “A Crisis in Student Loans? How Changes in the Characteristics of Borrowers and in the Institutions They Attended Contributed to Rising Loan Defaults,” Brookings Institution, 2015. See also Mettler, Degrees of Inequality; Aaron Bady and Mike Konczal, “From Master Plan to No Plan: The Slow Death of Public Higher Education,” Dissent, 2012. ↩
- Kevin Carey, “A Quiet Revolution in Helping Lift the Burden of Student Debt,” New York Times, 2015. ↩
- David J. Deming and Christopher R. Walters, “The Impacts of Price and Spending Subsidies on U.S. Postsecondary Attainment,” 2017. ↩
- Page and Scott-Clayton, “Improving College Access in the United States.” ↩
- Caroline Hoxby and Sarah Turner, “Expanding College Opportunities for High-Achieving, Low Income Students,” Discussion Paper 12-014, Stanford Institute for Economic Policy Research, 2013; Page and Scott-Clayton, “Improving College Access in the United States.” ↩
- Page and Scott-Clayton, “Improving College Access in the United States.” ↩
- Susan Scrivener, Michael J. Weiss, Alyssa Ratledge, Timothy Rudd, Colleen Sommo, and Hannah Fresques, “Doubling Graduation Rates: Three-Year Effects of CUNY’s Accelerated Study in Associate Programs (ASAP) for Developmental Education Students,” MDRC, 2015. ↩
- World Economic Forum, The Global Competitiveness Report 2014-2015. ↩
- Richard Arum and Josipa Roksa, Academically Adrift: Limited Learning on College Campuses, University of Chicago Press, 2011. ↩
- Jeffrey J. Selingo, “Demystifying the MOOC,” New York Times, 2014; Stephanie Garlock, “Is Small Beautiful? Online Education Looks Beyond the MOOC,” Harvard Magazine, 2015. ↩
- Scott Freeman, Sarah L. Eddya, Miles McDonough, Michelle K. Smith, Nnadozie Okoroafor, Hannah Jordt, and Mary Pat Wenderoth, “Active Learning Increases Student Performance in Science, Engineering, and Mathematics,” PNAS, 2014. ↩
- Amy Laitinen, “Cracking the Credit Hour,” New America Foundation and Education Sector, 2012. ↩
- Alex Tabarrok, “Tuning In to Dropping Out,” Chronicle of Higher Education, 2012. ↩
- Davis Jenkins and John Fink, “What We Know about Transfer,” Columbia University, Teachers College, Community College Research Center, 2015; Public Agenda, Community College Research Center, and the Aspen Institute, “Tackling Transfer,” 2016. ↩
- Public Agenda et al, “Tackling Transfer.” ↩
- Public Agenda et al, “Tackling Transfer.” ↩
- James Rosenbaum and Janet Rosenbaum, “The New Forgotten Half and Research Directions to Support Them,” William T. Grant Foundation, 2015. ↩
- Anemona Hartocollis, “At Colleges, What’s Old Is New: Retirees Living on Campus,” New York Times, 2019. ↩