Study: Nonprofit Colleges Failing to Graduate Students

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June 1, 2016, New York Times

In 2014, U.S. college graduation rates ranked 19th out of 28 countries studied by the OECD. In 1995, the United States was first. A new report, “Incomplete: The Quality Crisis at America’s Private, Non-Profit Colleges,” by Tamara Hiler, Lanae Erickson Hatalsky, and Megan John at Third Way, points to further decline:

Only 55 percent of these students who attend private nonprofit colleges graduate within six years. Of the 1,027 private colleges studied, 761 have graduation rates of less than 67 percent. At public universities, which the report does not study, the rate is even lower, 46 percent. Historically, public universities are charged with providing education to the masses and have less control over their admission standards.

NPQ has reported on the barriers to college graduation that low-income students face and how structural racism can play a role. Nearly 60 percent of first-year college students discover that they are not ready for postsecondary studies. They are required to take remedial courses, which do not earn college credits. First-generation students face academic, economic, and social challenges in postsecondary education that some schools address better than others. Changing demographics of postsecondary education also include the rising tide of nontraditional students, many with work and family responsibilities in addition to the concerns and barriers faced by traditional students.

If there were a single reason for the nation’s abysmal college dropout rate at both private nonprofit and public institutions, there might be a silver bullet solution, but this issue is far too complex.

This degree of institutional failure revealed in this new report calls into question whether private, nonprofit colleges are worth the cost. A few of America’s universities may offer the best education in the world, but in terms helping the average teenager become a college graduate, most of the system is failing.

The Third Way report points out that high schools in which more than a third of students do not graduate on time are labeled to receive special attention by federal standards. If colleges were held to that measure, 74 percent of the private nonprofit colleges and 83 percent of public colleges would fail. But there isn’t a widely accepted bar for college graduation rates; a college can have a graduation rate as low as 2 percent and still preserve its accreditation.

Students who do not earn a degree within six years are unlikely to finish at all. Michael Dell said, “You don’t have to be a genius or a visionary or even a college graduate to be successful. You just need a framework and a dream.” Drawing inspiration from billionaire entrepreneurs like Dell, Jobs, Gates, and others who hold up their example of dropping out as a badge of honor would be like hoping to be drafted by the NFL or NBA or winning the lottery. The reality is that those who can achieve success after dropping out most often rely on a set of skills and a network of relationships they possessed before college. The vast majority of America’s college dropouts are more likely than graduates to be unemployed, poor, and to default on their student loans.

“Graduation rates are primarily two factors: what the student brings and what the college brings to the experience,” said Bob Shireman, senior fellow at the Century Foundation, who specializes in accountability for for-profit colleges.

Colleges that have high graduation rates tend to be more selective and tend to have students who are more affluent and more academically prepared. Colleges with lower graduation rates tend to admit a higher percentage of students with Pell grants, which usually go to lower-income students.

“It’s not that the low-income students are destined to fail,” Mr. Shireman said. “It’s just that they have more challenges, so it takes a lot more resources to ensure that they succeed.”

NPQ reported in 2012 that student loan debt exceeds $1 trillion. With tuition rising, inflation-adjusted wages falling, and even college graduates struggling to find good jobs, the value of a college degree may seem to be in doubt. However, research shows that higher education levels generally lead to higher earnings, better health, more community engagement and more trust in governments and institutions. Investing in a college education remains a wise economic decision for the average person, especially when the student’s investment is prudent, evaluating complex issues such as student debt accumulation and the varying marketability of courses of study.

While there is a strong statistical correlation among student family income, selective admissions, and graduation rates, there are surely enough good colleges with support systems defying the odds and offering all college students true opportunity to achieve their life’s goals.—James Schaffer

  • Please be careful with using statistics like this as the remediation debate is highly political and not nearly as simple as your statement suggests:

    “Nearly 60 percent of first-year college students discover that they are not ready for postsecondary studies. They are required to take remedial courses, which do not earn college credits.”

    Even the article you linked to notes that the tests colleges use to determine if students need remediation are highly inaccurate. There also is a substantial financial incentive for colleges to require additional coursework from students, especially as those courses are taught by adjuncts who do not cost as much to hire as regular faculty.