Report|Education   23 Minute Read

The State of American Higher Education Outcomes

Published July 18, 2017

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Executive Summary

In the economy of today and tomorrow, the demand for a more educated and skilled workforce will only continue to grow. Jobs that require a postsecondary education are increasing in demand, and those that do not are both shrinking in number and in pay. Thus, the need for an effective and affordable higher education system grows more important every year. In other words, higher education – whether it’s a four-year, two-year, or certificate program – is now a necessity, not a luxury.

This report shows that getting better postsecondary outcomes must be at the forefront for policymakers seeking to prepare people to seize opportunity in the new economy. It seeks to measure how the American higher education system is doing based on three baseline metrics crucial for student success: 1) college completion, 2) post-enrollment earnings, and 3) loan repayment. We look at these outcomes across four-year, two-year, and certificate-granting institutions, as well as across the institutional sectors of public, private non-profit, and for-profit schools. We also examine positive and negative trends across multiple measures in order to tell a more complete story.

Among our findings:

Four-year institutions:

  • Completion: While the majority of institutions graduate more than half of their first-time, full-time students, 45% still graduate less than half.
  • Earnings: At 85% of four-year institutions, at least half of students who used federal aid were able to earn the more than the typical high school diploma holder six years after enrollment. However, in 222 four-year colleges, the majority of their students earned less.
  • Loan Repayment: Additionally, 24% of four-year institutions leave more than half of their students unable to pay down at least $1 of their loan principal three years later.

Two-year institutions:

  • Completion: While the typical two-year institution has a median graduation rate of 24% for their first-time, full-time students, which is 43 points lower than certificate-granting institutions, they still demonstrate more positive earnings outcomes than certificate-granting institutions.
  • Earnings: The majority of two-year institutions still struggle to prepare their students for a well-paying job. In fact, at 59% of two-year institutions, most students are earning less than $25,000 per year six years after they entered.
  • Loan Repayment: With many former students earning so little, it’s not surprising that 79% of these institutions also leave the majority of their students unable to start paying down their loans three years after attending.

Certificate-granting institutions:

  • Completion: While certificate-granting institutions often serve lower-income students, similar to two-year institutions, they display a median graduation rate of 67%, which is 43 points higher than two-year colleges. This may be partially explained by certificate programs’ shorter length, requiring less time to complete than an associate’s degree.
  • Earnings: Even with substantially higher graduation rates than two year institutions, certificate-granting institutions still show poorer earnings outcomes. At one in five certificate-granting institutions, at least three-quarters of students who used federal loans or grants to attend earn less than the average high school graduate six years after enrolling.
  • Loan Repayment: At 77% of certificate-granting institutions, the majority of their students were unable to start paying down their loans within three years. When looking across graduation rates, post-enrollment earnings, and loan repayment, no certificate-granting institutions performed above 75% on all three metrics.

With so much at stake, it’s critical that we understand the outcomes that federally-funded institutions produce. Some institutions graduate most of their students, increase earnings potential, and enable them to adequately repay their student loans. However, there are also many others that do not. This look at the State of American Higher Education Outcomes demonstrates that there is more work to be done.

The State of American Higher Education Outcomes

In the 21st century economy, higher education is no longer a luxury for the few, but a necessity for economic opportunity. Over the next 10 years, jobs requiring a postsecondary education credential will continue to grow much more rapidly than those that do not. In fact, of the 15 fastest-growing professions, more than two-thirds require some form of postsecondary education.1

Yet the United States is not keeping up. We lag behind global competitors in postsecondary attainment, currently ranking 11th, with education gaps among younger adults even more troubling.2 According to recent Organization for Economic Cooperation and Development data, an astounding 69% of young adults (ages 25-34) in South Korea have completed education beyond high school, with similar rates close to 60% in Canada and Japan. But in the U.S., those rates are hovering just above 45%, creating a skills gap that will make it harder for our country to compete and harder for individual workers to earn a comfortable, middle-class living.3

To help address this lag, U.S. taxpayers are making a big investment in postsecondary education. Last year, the federal government made a commitment of nearly $130 billion in taxpayer dollars (not including federal educational tax benefits) to support students and institutions of higher education in the form of grants and loans.4 This is more than the entire 2017 budgets for the Department of Energy, Department of Homeland Security, and Department of Justice combined.5 With competing demands and limited resources, this begs the question—are our investments in higher education helping U.S. workers stay competitive? We can’t answer this question without understanding the baseline performance of our higher education system in three ways that are crucial for student success: college completion, post-enrollment earnings, and loan repayment. This report outlines how the American system is performing for both students and taxpayers on those measures.

Three Key College Outcomes

College Completion

College completion is among the most critical measures of success in our higher education system. Individuals who complete a bachelor’s degree earn almost twice as much as those who only graduated high school and face an unemployment rate of less than three percent.6 Those who start but don’t complete college are the most likely to default on their students loans—even though they often have much less loan debt than their degree-holding peers.7 The federal graduation rate only measures how many first-time, full-time students graduated within 150% of the time expected to finish at the institution where they started. Therefore, for students at four-year colleges, the graduation rate measures the number of first-time, full-time students who completed within six years at the same institution, and for associate’s degree-seeking students, it measures how many completed within three years.

Post-Enrollment Earnings

Most students attend college because they think it will help them find a good-paying job that provides some financial stability.8 To measure this outcome, the U.S. Department of Education looks at how many of an institution’s students who used loans or grants to attend earn more than the average high school graduate ($25,000 per year) six years after they enrolled. This provides a strong early indication of whether or not these students are more financially secure after they attend—making the investment to enroll worth it. For example, if only half of an institution’s loan holding students earn more than the typical high school graduate post-enrollment, it’s essentially a financial coin flip for entering students about whether taking out loans to attend that institution will make them better off.

Loan Repayment

When students take out loans to attend an institution, it’s because they believe that school will provide them with better financial opportunities, which will in turn allow them to pay down that initial investment. To see if a school is delivering on that expectation, the federal government looks at the loan repayment rate, which measures the percentage of loan-holding students able to pay down at least one dollar towards their principal three years after leaving that school.9

Data Considerations

For this analysis, we use information from the U.S. Department of Education’s “Performance by Accreditor” database released in February 2017.10 This database includes information on over 5,300 currently operating institutions that are eligible to participate in Title IV programs, allowing their students to receive federal grants and loans to help pay for their education costs. While this data provides a starting point for policymakers and researchers alike, limitations within the data should also be considered when assessing individual or groups of institutions.

Our analysis only includes information on institutions that predominately offer undergraduate bachelor’s degrees, associate’s degrees, or certificate awards. Therefore, it excludes institutions that are predominately non-degree or graduate degree-granting institutions. It also excludes schools that had missing data on outcome metrics.

Since the federal graduation does not include information on part-time or transfer students, institutions with a higher percentage of first-time, full-time students may provide a more representative sample at that institution. However, part-time students are significantly less likely to complete than fist-time, full-time students, graduating less than half as often.11 So, including those students will most often decrease graduation rate outcomes. And while including transfer students may increase graduation rates at some institutions, it is not likely to affect overall rates substantially. Recent research shows that only 42% of students who transfer from a two-year college to a four-year college successfully graduate within six years of their original enrollment date.12 We recognize these limitations and, because of them, have limited our analysis of institutional graduation rates to cohorts of at least 30 students.

Post-enrollment earnings and loan repayment rates come from the U.S. Department of Treasury and U.S. Department of Education’s National Student Loan Data System. Both of these metrics only include students who have received federal student aid. Because post-enrollment earnings only include information on federally-aided students six years after they enrolled, this metric may be more representative at institutions with a higher percentage of student borrowers or Pell Grant recipients. And for loan repayment rate, this may also tell a more complete story at institutions with a high percentage of student borrowers. Both of these metrics also include non-completers, so for institutions with lower graduation rates, low earnings and loan repayment rates likely indicate poor outcomes for those who have started but not finished their degree. However, both of these metrics exclude currently enrolled individuals from their calculation at the time of measurement to avoid having earnings and loan repayment appear low for institutions that have a higher percentage of students going onto graduate school. Longer term earnings and repayment outcomes may yield different results across groups of institutions.13 More details on each metric, cohort year, and source of data can be found in the appendix.  

The State of Higher Education Outcomes in 2017

This report uses the three measurements of student outcomes outlined above to provide a broad overview of performance across three types of higher education institutions: four-year institutions, two-year institutions, and certificate-granting institutions.14 It classifies institutions by the predominant degree awarded and also offers a breakdown by sector: public, private non-profit, and for-profit, providing a snapshot of how each of these sectors are performing for those who enroll.

Within each section, we include descriptive statistics on what the typical four-year, two-year, and certificate granting institution looks like. This includes information on the number of institutions, the typical undergraduate enrollment, percent of first-time, full-time students, percent of students receiving Pell Grants, and the median net price. It also includes a breakdown of student outcomes by completion, post-enrollment earnings, and loan repayment.

Four-Year Institutions

Most students attend a four-year institution with the intent of obtaining a bachelor’s degree at that college. They typically take generalized courses within their first two years before then focusing on a particular major. The most popular fields of study in four-year institutions are business, health professions, and social sciences and history.15 While four-year degrees take more time and effort than other degrees and awards, they also show some of the best payoffs with earnings 40% above those who only obtain an associate’s degree.16

Overall, there are over 1,700 institutions that predominately award four-year degrees in the United States. These institutions typically enroll about 2,000 students per year, a similar number as two-year institutions, yet much more than certificate-granting colleges. They are generally more expensive per year, serve a more well-off population, and enroll more first-time, full-time students than other types of institutions. These institutions received $88.5 billion through federal grants and loans in 2014-2015.17

Quick Stats for Four-Year Institutions18:
  • Number of Predominately Bachelor’s-Degree Awarding Institutions: 1,749

4-Year Institutions4-year Students

  • Median Undergraduate Enrollment: 1,914
  • Median Net Price: $18,186
  • Median Enrollment of Students Receiving a Pell Grant: 37%
  • Median Percentage of First-Time, Full-Time Entering Students: 65%
  • Median Graduation Rate for First-Time, Full-Time Students: 52%
  • Median Percentage Earning Above Average High School Graduate: 65%
  • Median Loan Repayment Rate: 62%

College Completion

Graduation Rate- 4-year Institutions

While 219 (14%) institutions display graduation rates above 75%, 692 institutions (45%) graduate less than half of their first-time, full-time students. Additionally, 20 accredited institutions show fewer than nine out of 10 of their first-time, full-time students finishing their degree at the institution where they started.19

Graduation Rate- 4-year Institutions by Sector

There are significant differences in the graduation rate between public, private non-profit, and for-profit institutions. Private non-profit institutions show the strongest outcomes, with 62% of their institutions graduating more than half of their first-time, full-time students (though four in 10 still did not finish their degree at that institution). Over 40% of publics did the same, but only a quarter of for-profit four-year colleges graduate more than half of their students who are seeking a four-year degree.

Earnings Outcomes

Earnings Above HS Grad- 4-year Institutions

At the typical four-year college, most students earn more than a high school graduate after attending—but for far too many, that’s still not the case. Out of the 1,572 four-year institutions with earnings data available, 222 (14%) see the majority of their former loan holding students earning less than $25,000 six years after they enroll. Only 260 (17%) have more than three-quarters of their students earning above that threshold. 

Earnings Above HS Grad- 4-year Institutions by Sector

The distribution of earnings outcomes is relatively similar across sectors, though public institutions outperform their private non-profit and for-profit peers. In fact, 91% of public institutions have more than half of their students earning more than the average high school graduate, while only 83% of private non-profit colleges and 77% of for-profit colleges show the same success.

Loan Repayment

Repayment- 4-year granting institutions

At the typical four-year institution, most students are able to begin paying down their loans within three years. Twenty-three percent (364 institutions) have at least three out of four students paying down at least $1 towards their principal. However, there are nearly the same amount, 24% (385 institutions), that leave less than half of their students able to begin paying down their loans within that same time frame.

Repayment- 4-year Institutions Breakdown by Sector

The data regarding loan repayment reveal significant differences across institutions. Only 31% of four-year for-profit institutions have a majority of students able to begin paying down their loans within three years. Yet, most four-year public (74%) and private non-profit (80%) institutions fare much better, with most of their students able to pay down their debt within this same time frame.

Summary

Four year institutions generally serve a higher income, greater full-time student population in comparison to two-year and certificate-granting institutions. Though most four-year institutions help the majority of their students graduate, obtain earnings above the average high school graduate, and repay any federal loans that they took out in order to attend, there remain some much needed areas for improvement within these types of institutions.

While the majority of institutions graduate more than half of their first-time, full-time students, 45% still graduate less than 50%. Impressively, most four-year institutions (85%) show their former students earning more than the average high school graduate after attending. However, 222 still leave the majority of their students unable to do so. Additionally, 24% of four-year institutions leave more than half of their students unable to pay down at least $1 of their loan principal within three years after attending.

There also remain noticeable differences in performance across sectors. Private non-profit institutions graduate their students more often than other sectors, while for-profit institutions have the lowest graduation rates with only 25% of their institutions completing a majority of their first-time, full-time students. Over 90% of public institutions showed a majority of their students earning above $25,000 within six year of entering while 83% of private non-profits and 77% of for-profits show the same success. The starkest differences in performance across sector appears in loan repayment. While 74% of public and 80% of private institutions have a majority of their students able to begin paying down their loans within three years, only 31% of for-profits show the same outcome.

Two-Year Institutions

While many students enter two-year schools with the intent of gaining an associate’s degree or transferring to a four-year institution, others attend with an objective of taking a specific class or to gain a certain type of skill. Additionally, many of these institutions are open-access, meaning they do not require test scores or a specific grade-point average for admission.

Overall, there are 1,044 institutions that predominately award associate’s degrees across the United States, significantly less than bachelor’s or certificate-granting institutions. However, they typically enroll the highest number of students at each institution. They are generally the least expensive per year, serve a lower-income population than four-year institutions, and enroll fewer first-time, full-time students than four-year institutions (but more than their certificate-granting peers). These institutions received $21.2 billion through federal grants and loans in 2014-2015 compared to $88.5 billion for four-year institutions.

Quick Stats for Two-Year Institutions:
  • Number of Predominately Associate’s-Degree Awarding Institutions: 1,044

2-Year Institutions2-Year Students

  • Median Undergraduate Enrollment: 2,343
  • Median Net Price: $8,306
  • Median Enrollment of Students Receiving a Pell Grant: 45%
  • Median Percentage of First-Time, Full-Time Entering Students: 39%
  • Median Graduation Rate for First-Time, Full-Time Students: 24%
  • Median Percent Earning Above Average High School Graduate: 48%
  • Median Loan Repayment Rate: 39%

College Completion

Graduation Rate- 2-year Institutions

Only 146 (15%) two-year institutions graduate more than half of their first-time, full-time students, while 811 (85%) do not. Additionally, 67 two-year institutions graduate less than 10% of their first-time, full-time students, while only 27 graduate more than 75%. 

Graduation Rate- 2-year Institutions by Sector

Three-quarters of the institutions that predominately award two-year degrees are public, yet publics graduate a smaller percentage of first-time, full-time students than their private non-profit or for-profit counterparts. While 68% of two-year public colleges graduate less than a quarter their first-time, full-time students, only 20% of privates and 8% of for-profits do the same. Additionally, only 3% of public two-year colleges have more than half of their first-time, full-time students finish at the institution where they started. However, 40% of private and 58% of for-profits have graduation rates over 50%.

Earnings Outcomes

Earnings Above HS Grad- 2-year Institutions

Consistent with the data on college attainment and future earnings, former students at two-year institutions show significantly less early career earnings potential than those attending four-year colleges.20 As shown above, 578 (59%) of two-year institutions see most of their former loan holding students earning less than the average high school graduate six years after they enrolled. And only 38 institutions (4%) have over 75% of their former students earning above that threshold.

Earnings Above HS Grad- 2-year institutions by Sector

Private non-profit two-year institutions demonstrate the strongest earnings outcomes. Over a quarter of them see more than three in four students earning above the average high school graduate six years after enrolling. However, the for-profit sector is twice as likely to show some of the poorest outcomes, as 8% of them have more than three in four students earning less than the average high school graduate.

Loan Repayment

Repayment- 2-year Granting Institutions

Despite all the press coverage of big loan balances carried by those who attend four-year programs, two-year institutions are more likely to leave the majority of their students behind in repayment. In fact, only 21% of two-year institutions see the majority of their students beginning to pay down their loans within three years of leaving. And with interest accumulation, student borrowers who attended the remaining two-year institutions may find themselves in more debt, rather than less, even three years after they attended.

Repayment- 2-year Institutions by Sector

A little more than three-quarters of public two-year institutions see between 25 and 50% of students beginning to pay down their loans within a three-year time frame. Private non-profits show stronger loan repayment outcomes, with 51% of them demonstrating that a majority of their students are able to start paying down their debt three years after leaving—though even in this higher-performing part of the sector, nearly half don’t.

Summary

Two-year institutions serve different demographics than four-year institutions. They typically serve lower-income students that are less likely to be enrolled as first-time or full-time. Student outcomes should be viewed through this lens, especially graduation rates, when making comparisons to four-year institutions.

Most two-year institutions graduate less than half of their first-time, full-time students. Some argue that this figure should not be used to evaluate institutional effectiveness, as it fails to represent a majority of a two-year college’s student body who are not first-time, full-time, and fails to capture transfer students who move on to four-year schools, which should be viewed as a measure of success.21 However, as previously mentioned, even though today’s first-time, full-time graduation metric only covers a certain portion of an institution’s student body, the inclusion of part-time students would likely lower this figure at most institutions, as only a fraction of those students graduate in comparison to first-time, full-time.22 And while the inclusion of transfer student outcomes may raise the graduation at some high-performing institutions, those increases are likely to be inconsequential across all two-year institutions.23

The majority of two-year institutions still struggle to prepare their students for a well-paying job that allows them to pay down their students loans after attending. In fact, 59% of two-year institutions have most of their students earning less than $25,000 per year six year after they entered. With many former students earning so little, it’s not surprising that 79% of these institutions also leave the majority of their students unable to pay down their loans after attending. 

While two-year for-profit colleges perform the best in first-time, full-time graduation rates, they also perform the worst in terms of the percentage of their former students earning above an average high school graduate and in loan repayment. While only 3% of public colleges have a majority of their first-time, full-time students graduating, they perform slightly better than for-profits in terms of earnings and loan repayment. Private non-profits fall in the middle of publics and for-profits for graduation rate. However, they outperform these sectors on the other two metrics. 

Certificate-Granting Institutions

Instead of focusing on general education, most certificate programs are structured to help workers obtain the skills they need to perform a specific type of job—like becoming an auto mechanic, nursing assistant, or hairdresser. These programs are often shorter in length, many allowing students to earn certificates in less than one year. In part because of this condensed timeline, students within these programs are often more likely to complete a certificate they’ve started.

Even though certificate-granting institutions are typically much smaller than their predominantly bachelor’s or associate’s degree granting peers, these types of institutions make up the majority of higher education providers in the United States. They are generally shorter in length, yet more expensive per year, than two-year institutions. They also serve a higher proportion of Pell Grant recipients and enroll fewer first-time, full-time students than two-year institutions. These institutions received $10.8 billion through federal grants and loans in 2014-2015 compared to $21.2 billion at two-year institutions.  

Quick Stats for Certificate-Granting Institutions:
  • Number of Predominately Certificate-Granting Institutions: 2,273

Certificate-Granting InstitutionsCertificate-Granting Institutions - Students

  • Median Undergraduate Enrollment: 145
  • Median Net Price: $12,782
  • Median Enrollment of Students Receiving a Pell Grant: 58%
  • Median Percentage of First-Time, Full-Time Entering Students: 31%
  • Median Federal Student Aid Received: $1 million per year
  • Median Graduation Rate for First-Time, Full-Time Students: 67%
  • Median Percent Earning Above Average High School Graduate: 40%
  • Median Loan Repayment Rate: 38%

College Completion

Graduation Rate- Less than 2-year Institutions

Over three-quarters of certificate-granting institutions graduate more than half of their students. However, 160 institutions (10%) graduate less than a quarter of their students, with 17 of those institutions graduating fewer than one in 10 of their first-time, full-time students.  

Graduation Rate- Less than 2-year Institutions by Sector

The graduation rate is noticeably higher for all types of institutions in these certificate-granting schools than their two-year counterparts: 90% of for-profits graduate over half of their students, while 73% of private and 44% of public do the same. A much smaller number of certificate-granting institutions show worrisome graduation outcomes, with only 29% of public, 5% of private non-profit, and 1% of for-profit institutions graduating less than 25% of their students.

Earnings Outcomes

Earnings Above HS Grad-Certificate Granting Institutions

Not surprisingly, in comparison to predominately bachelor’s and associate’s degree-granting institutions, institutions that primarily award certificates generally leave their former loan-holding students less likely to earn above what an average high school graduate would. In fact, only 376 institutions (27%) see a majority of their former students earning above the average high school graduate, while 995 (73%) do not. Twelve of these institutions see only one in 10 of their students earning above $25,000 six years after enrolling, yet all of them still remain eligible to receive federal funding. 

Earnings Above a HS Grad- Certificate Granting Institutions by Sector

Public and private non-profit certificate-granting institutions significantly outperform their for-profit counterparts when it comes to this measure. Here, 43% of public institutions and 51% of private non-profits see a majority of their former students earning above the average high school graduate. While for-profits make up a majority of these types of institutions, almost a third of them have over 75% of their students earning below this threshold.

Loan Repayment

Repayment- Certificate Granting Institutions

Most certificate-granting institutions (77%) see the majority of their student bodies unable to begin paying down their loans within three years of leaving. In fact, there are more institutions that have nine out of 10 students unable to pay back their loans (22) than those that have over 75% able to do so (17).

Repayment- Certificate Granting Institutions by Sector

For-profits make up over two-thirds of the institutions that predominately awarded certificates. They also have the highest percentage of institutions (23%) that have at least 75% of their students unable to repay their loans. Private institutions show the strongest repayment rates with 69% of them seeing the majority of their students paying down their principal, and 25% of publics show the same outcome. 

Summary

Predominantly certificate-granting institutions serve a similar population to two-year institutions. They typically enroll lower-income students that are the least likely to be enrolled in college as first-time or full-time students. In fact, many enrollees may be adults returning to school to obtain a specific credential. As is true with two-year institutions, student outcome data should be viewed through this lens, especially when making comparisons to their four-year counterparts.

While certificate-granting institutions typically serve lower-income students, similar to two-year institutions, they display a median graduation rate that is 43% higher. Most graduate a majority of their first-time, full-time students, with one-third of them graduating over three-quarters of this student population. This may be partially explained by certificate programs’ shorter length, requiring less time to complete than an associate’s degree. Nevertheless, two-year institutions display more positive earnings outcomes. Over 20% of certificate-granting institutions leave over three-fourths of their students earning less than the average high school graduate and 77% of institutions leave the majority of their students unable to pay down their loans.

Similar to two-year college outcomes, for-profits perform the best in terms of graduation rate, yet the worst in post-enrollment earnings and loan repayment. In fact, 90% of them graduate a majority of their first-time, full-time students, while over 80% of them leave the majority of their students unable to pay down their loans within three years of leaving. While there are only 74 of them, private non-profit certificate-granting institutions demonstrate the strongest outcomes across all three measures, while public certificate-granting institutions show the lowest graduation rates, but earnings and loan repayment outcomes in the middle of the pack. 

Takeaways

Each institution of higher education has its own unique mission. They each serve different types of students, aim to prepare their students for diverse post-collegiate experiences, and have varying time and effort requirements for graduation. While some primarily focus on all of their students obtaining a bachelor’s degree, others pride themselves on successfully transferring their students or providing their students with the skills and credentials to become gainfully employed. However, even with these key differences, we still see some trends that persist within and across different types of institutions.  

Multiple Measures Tell a More Robust Story

While one metric gives you a glimpse into institutional performance, poor or positive trends across multiple measures tell a more complete story. Below, we look at institutions that graduate most of their students, lead them to earn more than the average high school graduate, and equip them to repay their loans.

Outcomes over 50 All

Unfortunately, most institutions fail to meet that mark. In particular, only 19% of public institutions and 5% of for-profits hit these benchmarks on all three outcomes. Private non-profits demonstrated the strongest outcomes with a majority of their institutions hitting this three-part benchmark.

We also looked at institutions that showed a majority of their students dropping out, earning less than $25,000, and unable to repay their loans.  

Outcomes below 50 All

Here, public institutions showed some of the most troubling outcomes, with over a third failing to demonstrate at least a 50% success rate on each of the combined measures. While only 13% of for-profit institutions failed to meet these benchmarks on all three measures, over 65% failed to have the majority of their students earning above the average high school graduate and able to pay down their loans. A similar pattern is present across certificate-granting institutions. For-profits make up 68% of certificate-granting institutions, and while many do graduate a substantial amount of their students, they often fail to adequately prepare them to earn a decent living and repay their educational debt. 

There are More Institutions with Really Strong Outcomes Than with Really Poor Outcomes

Although there is obvious room for improvement within each institution type and sector, there are many colleges that demonstrate strong outcomes across multiple measures, especially in comparison to those that leave over three-quarters of their students degreeless, underemployed, and unable to repay their debt. 

Best and Worst

Overall, there were 101 institutions that performed above 75% on all three of the metrics used in this paper, compared to only three institutions that performed below 25% on all three. Almost all of the high performers were bachelor’s degree granting institutions, with 2% representing associate’s degree granting institutions. There were no certificate-granting institutions that performed above 75% on all three metrics.

Four-fifths of these top-performing schools were private non-profit colleges, while the remaining one-fifth were public colleges. There were no for-profit institutions that displayed outcomes above 75% in all three metrics. Unfortunately, most of these high-performing institutions are highly selective and enroll a wealthier population. At 81% of the 101 institutions who have strong outcomes in all three metrics, less than 20% of students receive a Pell Grant, a federal award for low-income undergraduate students.

While only three institutions show outcomes below 25% across all three metrics, 73 show outcomes below 25% for repayment and earnings. Furthermore, 102 are below that mark in repayment and graduation rate, and 20 in earnings and graduation rate. While this may not seem like a lot, a significant amount of federal grant and loan dollars flow to these programs every year.

Taxpayers Send a Lot of Money to Low-Performing Institutions

Taxpayer Dollars to Institutions

In 2014-2015, institutions that showed outcomes below 25% across all three metrics—the worst of the worst—received $30 million in federal financial aid. The numbers get even more staggering: $276 million went to those with outcomes below 25% for repayment and earnings, $5.9 billion for repayment and graduation rate, and $375 million for earnings and graduation rate. That’s billions of taxpayer dollars going to institutions that aren’t delivering on their promise to their students.

Conclusion

Overall, the federal government gives $130 billion to institutions of higher education every year. With that much at stake, it’s imperative that we understand how this money is being used and the outcomes that federal-funded institutions produce. Some institutions graduate most of their students, increase their earning potential, and enable them to adequately repay their student loans. However, there are also many others that do not. This look at the State of American Higher Education Outcomes demonstrates that there is more work to be done. We will not be able to compete globally or provide increased economic opportunities for most Americans unless we improve the quality of our higher education system.

Appendix

Appendix

Graduation Rates

Appendix-Graduation Rate

Employment

Appendix-Employment

Repayment

Appendix_Repayment

Download the Data

Download the data from this report.

  1. United States, Bureau of Labor Statistics, “Employment Projects: 2012-2022 Summary,” December 19, 2013. Accessed on June 6, 2017. Available at: http://www.bls.gov/news.release/ecopro.nr0.htm.

  2. ”Population with Tertiary Education,” Organisation Economic Co-operation and Development. Accessed on June 6, 2017. Available at: https://data.oecd.org/eduatt/population-with-tertiary-education.htm.

  3. ”Population with Tertiary Education,” Organisation Economic Co-operation and Development. Accessed on June 6, 2017. Available at: https://data.oecd.org/eduatt/population-with-tertiary-education.htm.

  4. United States, U.S. Department of Education, “Performance Data by Accreditor,” Database. Accessed March 25, 2017. Available at: https://www.ed.gov/accreditation.

  5. Denise Lu and Kim Soffen, “What Trump cut in his agency budgets,” The Washington Post, May 23, 2017. Accessed on June 8, 2017. Available at: https://www.washingtonpost.com/graphics/politics/trump-presidential-budget-2018-proposal/?utm_term=.2e4b7f6338a1.

  6. United States, Bureau of Labor Statistics, “Unemployment rates and earnings by educational attainment, 2016,” Accessed on June 6, 2017. Available at: https://www.bls.gov/emp/ep_chart_001.htm.

  7. United States. Council of Economic Advisors, “Investing in Higher Education: Benefits, Challenges, and the State of Student Debt," July 18, 2017. Accessed on March 15, 2017. Available at: https://obamawhitehouse.archives.gov/sites/default/files/page/files/20160718_cea_student_debt.pdf.

  8. Kevin Eagan, “The American freshman: National Norms Fall 2015,” Cooperative Institutional Research Program at the Higher Education Research Institute at UCLA. Accessed on May 15, 2017. Available at: https://heri.ucla.edu/pr-display.php?prQry=196.

  9. In this case, repayment rates are measured by the share of former students (both completers and non-completers) with federal loans who are able to pay down at least $1 of the principal balance within three years upon leaving the institution.

  10. United States, U.S. Department of Education, “Performance Data by Accreditor,” Database. Accessed March 25, 2017. Available at: https://www.ed.gov/accreditation.

  11. Complete College America. “Time is the enemy: The surprising truth about why today’s college students aren’t graduating…And what needs to change,” September 2011.  Accessed on June 8, 2017. Available at https://eric.ed.gov/?id=ED536827.

  12. Meredith Kolodner, “Fewer than one in seven community college students transfer and get a bachelor degree – but there’s hope,” Hechinger Report, January 19, 2016. Accessed on April 17, 2017. Available at: http://hechingerreport.org/how-often-do-community-college-students-who-get-transfer-get-bachelors-degrees/.

  13. For more information on the limitations within the data, please visit: https://collegescorecard.ed.gov/assets/UsingFederalDataToMeasureAndImprovePerformance.pdf.

  14. Data on predominately 4-year, 2-year, and certificate programs are mutually exclusive. Predominant award to determine by the number of completions for bachelor’s, associate’s or certificates in a given year – which one was granted most.

  15. United States, U.S. Department of Education, National Center for Education Statistics, “Bachelor’s degrees conferred by postsecondary institutions, by field of study: Selected years, 1970-71 through 2014-2015,” webpage. Accessed on June 8, 2017. Available at:  https://nces.ed.gov/programs/digest/d16/tables/dt16_322.10.asp?current=yes.

  16. United States, Bureau of Labor Statistics, “Unemployment rates and earnings by educational attainment, 2016,” Accessed on June 6, 2017. Available at: https://www.bls.gov/emp/ep_chart_001.htm.

  17. When using “typical” or “general” institution throughout this paper, it refers to the median.

  18. United States, U.S. Department of Education, “Performance Data by Accreditor,” Database. Accessed March 25, 2017. Available at: https://www.ed.gov/accreditation

    This paper uses the institution as the unit of analysis. Using a weighted average for student outcomes may produce different results.

  19. Data breakdowns are listed as such: 0-10% = 0-9.99%, 10-25% = 10%-24.99%, 25-50% = 25-49.99%, 50-75% = 50-74.99%, 75-100% = 75-100%.

  20. United States, Bureau of Labor Statistics, “Unemployment rates and earnings by educational attainment, 2016,” Accessed on June 6, 2017. Available at: https://www.bls.gov/emp/ep_chart_001.htm.

  21. Thomas Bailey, “New approach to calculating college graduation rates, while flawed, is a major step forward,” Hechinger Report, April 17, 2012, Accessed on June 8, 2017. Available at: http://hechingerreport.org/new-approach-to-calculating-college-graduation-rates-while-flawed-is-a-major-step-forward/.

  22. Complete College America. “Time is the enemy: The surprising truth about why today’s college students aren’t graduating…And what needs to change,” September 2011.  Accessed on April 17, 2017. Available at https://eric.ed.gov/?id=ED536827.

  23. Meredith Kolodner, “Fewer than one in seven community college students transfer and get a bachelor degree – but there’s hope,” January 19, 2016. Accessed on April 17, 2017. Available at: http://hechingerreport.org/how-often-do-community-college-students-who-get-transfer-get-bachelors-degrees/.

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