Completion Rates Still Smell Bad By Any Other Name

In my last blog entry, “One Really Expensive Graduation Party,” I talked a bit about the skyrocketing costs of producing degrees at public two- and four-year colleges. This time around, I’d like to address one of the leading factors in that high price tag: completion rates.

In preparation for the release of our report, Leaders & Laggards: A State-by-State Report Card on Public Postsecondary Education, we looked at how each state’s higher education system is performing across a wide variety of indicators. One such indicator is termed “Student Access & Success”, in which we looked at data reflecting a state’s completion rate and retention rate (the rate at which students stay enrolled beyond their first year) for both two-and four-year institutions. 

What we found was grim, at best. The national median completion rate for four-year institutions was just 54.5%. That’s an astonishingly inefficient rate, but many argue that a lack of student motivation is a key factor in such a low graduation rate. That’s why it can be instructive to look at retention rates as well, since it stands to reason that unmotivated students are unlikely to continue to take courses beyond their first year. The median retention rate, however, stands at 77.1%. That means nearly a quarter of students who are motivated enough to persist beyond their first year of higher education still fail to earn a credential.

Two-year institutions fared significantly worse in both metrics. The median completion rate for two-year schools is only 21.8%, while the median retention rate sits at 58.2%. The disparity between the two figures is particularly troublesome for two-year institutions—it’s a two-year program, and less than half of the students who persist in the program after completing half of their degree program continue to the finish line. 

However, we realized that examining or putting a grade on those figures in isolation could be a bit misleading. Since this data only accounts for first-time, full-time students, it leaves out a wide swath of students who either re-enroll or only take courses on a part-time basis. Community colleges typically get irate when completion or retention rates are brought up because a large segment of their enrollment consists of returning or part-time students, in addition to students who transfer to another school. 

It’s a fair argument, so to solve this problem, we employed an additional metric: completions per 100 full-time equivalent (FTE) students. FTE is a common measure used in academia. To put it simply, you add up all the credit hours taken by students, regardless of whether they are full- or part-time enrollees. You then divide those credits up into chunks representing what a full-time student would take. This measure is far more inclusive than what is often reported out by the U.S. Department of Education.

What we found here was appalling, to say the least. For four-year institutions, only 19.7 credentials were awarded for every 100 full-time equivalent students. Giving some credence to the complaints of community colleges, two-year institutions weren’t far off at 17.2 completions per 100 FTEs.

The bottom line, however, is that no matter which way you choose to look at it, postsecondary education graduation rates are abysmal. Yes, the completions per 100 FTE measure does paint two-year institutions in a better light, but only relative to their four-year brethren. At the end of the day, however, pathetic is still pathetic. 

Pathetic, in this case, is also extremely expensive. Every dollar spent on students who fail to complete college is effectively dropped into the abyss, and it’s a big part of why our nation’s costs per completion rates are so high. It also often leaves those students with a significant amount of debt and without any real increase in their employability. And since most institutions get their funding based on enrollments—not outcomes—there’s no financial incentive for schools to take steps to improve. That’s also something we address in our report, and it’s something we’ll touch on in another upcoming entry.

On June 19th, you’ll be able to find out how your state fares in terms of student access and success—along with a host of other higher education metrics—when we unveil Leaders & Laggards. We hope you’ll join us in Washington, DC.  You can register for the event for free right here.

Domenic Giandomenico is Director of Education and Workforce Programs for ICW