High College Dropout Rate Threatens U.S. Growth

This article was originally published by the Fiscal Times on Tuesday, Oct. 28, 2010

Just over half the students who enter a four-year college complete their degree and even fewer community college students graduate, leaving many without the qualifications they need to land a job.

By Katherine Reynolds Lewis

Millions of first-year college students and their families now paying for the most expensive postsecondary education in U.S. history face a land mine: just 56 percent of those who enroll in a four-year college earn a bachelor’s degree. Those new undergraduates are now reaching the end of the first semester, a critical crossroads between finishing and dropping out.

Some students drop out because of trouble paying the cost — the average college debt upon graduation is a whopping $24,000. Others struggle to hold down a job while also attending college — tuition, room and board at many private universities tops $50,000 a year, and some state schools charges $10,000 a year just for tuition. But more than half of first-year students are simply underprepared for college-level work, said Jeff King, director of the Koehler Center for Teaching Excellence at Texas Christian University, which is developing a tool to identify students who are most at risk of dropping out. “There’s increasing pressure … to prove that after these thousands of dollars that parents are paying for a credential, the students are learning,” King said.

Education policymakers for decades have focused on opening the doors to higher education to more students, without much thought about whether those students are prepared and what happens if they’re not. Now, they’re starting to take action. Over the past decade, the U.S. has fallen from leader to 12th place in the ratio of young people with the equivalent of a bachelor’s degree, well behind Russia, Canada, Korea and Japan.


Americans with a four-year college degree can earn far more than those with just a high school diploma; $60,954 on average in 2008, compared with $33,618, according to data from the National Center for Educational Statistics. That year, the education achievement gap cost between $1.3 trillion and $2.3 trillion in lost gross domestic product, because “American workers are, on average, less able to develop, master and adapt to new productivity-enhancing technologies,” a McKinsey & Co. report concluded.

In today’s knowledge-based economy, many employers are struggling to find qualified applicants to fill vacant jobs – a labor shortage that a Georgetown University report projects will grow to 3 million workers by 2018. The number of private-sector job openings this year through August outpaced the number of hires by a ratio of about five-to-one.

Even those students who graduate with a four-year degree may find themselves unqualified to fill good jobs, especially those who majored in the humanities. Craig Brandon, Keane, N.H.-based author of The Five-Year Party, said that when he was a college professor, he received reference requests from former students for jobs as clerks or waitresses. “They had $30,000 in student loans they were paying off in tips from a restaurant,” Brandon said.

National leaders from President Obama to Bill and Melinda Gates are now turning the spotlight on the need to better support incoming students and dramatically raise graduation rates, backed by billions of dollars in government and philanthropic funding. For the Obama administration, every tactic for raising graduation rates is an option, from competitive grants to withholding accreditation or federal funding, said Martha Kanter, under secretary of education for postsecondary education. “Everything’s on the table,” Kanter said in an interview with The Fiscal Times. “We just have too much failure. Too many students have fallen out.”

Those seeking to overhaul higher education want a renewed focus on learning, and an end to institutions collecting tuition dollars and churning out dropouts (or even graduates) without the basic skills needed to land a job in today’s economy. Colleges have been accused of “education malpractice,” by political scientist Andrew Hacker, co-author of Higher Education? Lecture courses of 400 to 500 students are taught by bored adjunct professors or graduate students, he said. “The first two years, particularly, are just dreadful in terms of teaching.”

Freshmen are cheaper to educate than upperclassmen, who are often taught by senior professors in smaller classes, said Kevin Carey, policy director at Education Sector, an independent think tank. “From a college’s standpoint, if a lot of freshmen don’t become seniors, that’s financially not a problem,” Carey said. “Colleges want enrollment, not degrees. There’s always another class of freshmen.

College Today? Party Time!

The time undergraduates spend on leisure and socializing rose to 41 hours a week in 2008 from 25 hours per week in 2003, according to research by the University of California at Berkeley. Many college students study fewer than eight hours a week – not much more than a middle school student, and far less than the institutions’ expectations of 30 to 40 hours a week, according to Robert Neuman, author of Are you Really Ready for College and former associate dean of student advising at Marquette University.

An analysis of student data by Virginia Commonwealth University showed that grades at the end of the first semester are the best predictor of whether a student eventually earns a degree. “The reality is, if students are doing well, they figure out a way to pay,” said Joseph Marolla, vice provost for instruction. “The number one priority is that students have to be successful.”

Virginia Commonwealth created “university college,” based around learning communities and consistent, centralized advising, to help students transition from high school. At the heart is a freshman course with 25 students in each class, whose teachers follow the same students through a three-semester curriculum. This past year, the college retained 85.3 percent of the freshman class, up from 80 percent in 2004, when the program started, Marolla said. University college cost $2 million dollars to implement, including hiring 43 new teachers in a single year, but paid for itself in tuition from the students who otherwise would have dropped out, he said.

Four-year universities and private institutions are also taking steps to lower the dropout rate and better identify students at risk. At Purdue University, for instance, students and teachers receive a daily signal of the student’s academic progress — either green, yellow or red — using a model that predicts the likelihood of dropping out, said Josh Jarrett, senior program officer for postsecondary success at the Gates Foundation.

Obama’s goal of 8 million more college graduates by 2020 will require a combination of 5 million more two-year degrees from community colleges, shorter certificate programs that have a tangible value in the workplace, and adult students returning to postsecondary education, reform advocates say. In 2008, just 30.5 percent earned a two-year degree in 150 percent of the usual time – or three years, according to the National Center for Educational Statistics.

“For the first time since the GI Bill, there is a concerted, clear federal effort to dramatically increase college persistence rates,” said Jeff Nelson, co-founder of Urban Students Empowered, a nonprofit in Chicago. “Many colleges are not intervening and are simply letting our students fail.”

In the next 30 to 60 days, the Education and Labor Departments will outline a new $2 billion competitive grant program, to be given to community colleges over four years for education and training programs, beginning with grants of at least $2.5 million. Similarly, the Aspen Institute will award a $1 million annual prize to community colleges with outstanding student success rates, and is spearheading Skills for America’s Future, a joint initiative of government, the private sector, community colleges and labor aimed at identifying and scaling the best models of education and training that prepare students for a transition into the workforce. This month, the Gates Foundation announced $20 million in grants for educational technology and created a $35 million grant program for innovative community colleges that are cutting dropout rates.

Ultimately, policymakers’ aim is to create “incentives that will really inspire colleges and universities to pick up these best practices and use them,” Kanter said. “We’re asking the country, `What are you doing to make a difference and what’s the evidence to show that you are?’”