Colleges are doing better than ever attracting new students, but the same can’t be said for getting students to finish degrees.
In fact, about four out of every 10 students who start college never finish, leaving many with student loan debt but no college degree to show for it. Growing research and resources show improving college completion rates is good for students, colleges/universities, and society overall. Is it time to jump on the bandwagon?
According to the National Student Clearinghouse Center (NSC), which tracks completion rate trends, the 2021 six-year completion rate for those who started in the fall of 2015 reached 62.2% (a 1.2% increase over 2014), with the largest increase in community colleges. CollegeTransitions.com reports that in 2021 just 41% of students completed college in four years.
A poll conducted by Third Way and New America found that due to the pandemic one out of every three students believe they’ll need an additional semester or year to finish college. Since this requires more funding, there’s a chance many of these students will never get their degree.
Those who don’t finish college see much lower earnings than their counterparts who do graduate.
2020 Bureau of Labor Statistics Data shows the following relationships between education and earnings:
- Less than a high school degree: $619 weekly and $32,188 annually
- High School Degree: $781 weekly and $40,612 annually
- Some college: $877 weekly and $45,604 annually
- Associate’s degree: $938 weekly and $48,776 annually
- Bachelor’s degree: $1,305 weekly and $67,860 annually
- Master’s degree: $1,545 weekly and $80,340 annually
- Professional degree: $1,893 weekly and $98,436 annually
- Doctorate degree: $1,885 weekly and $98,020 annually
Students aren’t the only ones impacted – institutions of higher learning are, too.
According to CampusLogic.com, “Students who drop out in order to attend a different institution, or who drop out entirely, will negatively impact graduation rates and generate lost tuition revenue.”
What’s an institution of higher learning to do?
Some states are using American Rescue Plan Act (ARPA) funds to expand programs shown to improve completions rates, like CUNY ASAP (which doubled participant graduation rates) and Bottom Line (which increased graduation rates by 23% in four years). Colorado has a task force charged with using remaining ARPA funds to improve completion rates. North Carolina invested $2 million of CARES Act funds to expand its Accelerate, Complete and Engage (ACE) program to enhance bachelor’s degree completion rates in the state’s school system.
Proposed legislation like the College Completion Fund Act would provide for $62 billion over 10 years on programs to help students complete their degrees. There’s a lot of lobbying for Federal retention and completion funds in 2023 fiscal year appropriations.
Some colleges are already moving ahead with their own retention grant programs.
EdSurge.com reports that the main reason students leave college is financial. Some colleges offer small grants for those close to graduating, owing a modest amount, who used up all other aid sources, and are at risk of dropping out due to funds. One study found about a third of colleges that used these grants experienced higher graduation rates among recipients.
Georgia State University’s retention grant program has had 86% of recipients since 2011 going on to complete their degrees. Perhaps even more notable: it also benefits the university. Boston Consulting Group showed “for every 1,500 grants disbursed, the university receives an additional $5.4 million to $9.2 million in revenue. Even after including the costs of the grants themselves and the costs associated with the administration of the program, the Boston Consulting Group estimated that Georgia State’s return on investment was between $4 million and $7.8 million.”
Grants are just one solution – there are others.
Refer to the U.S. Department of Education database containing individual college and university plans for driving retention and completion. Also the University Innovation Alliance has a playbook to help institutions interested in exploring and starting a retention and completion program.
For insights and assistance on how investing in a retention and completion program can have a positive impact on accounting and taxes, give RBT CPAs a call. We’re the Hudson Valley’s premier accounting firm and within the top 250 nationwide. A number of institutes of higher learning in the area are already our clients – see why. Give us a call.