The cost of not completing your degree?

There have been a number of initiatives in recent years to increase the number of individuals completing degrees.  President Obama has issued the challenge of having the United States return to a leadership role by having the highest percentage of adults with college degrees in the world.  This initiative has been echoed by several state initiatives such as Grow by Degrees in Virginia where Governor McDonnell is challenging Virginia to increase the number of individuals with degrees by 100,000 in the next 15 years.


By and large this call for increasing the number of adults with degrees is intended to enhance our workforce to make our states and nation more competitive.  Of course there are financial implications related to having more citizens with degrees.  We know that individuals who complete degrees earn more money than those who do not complete the degree.  For example, individuals who have completed degrees earn 40 percent more than those who have some college or have only completed college.


A recent study from the American Institutes for Research, The High Cost of Low Graduation Rates: How much does dropping out of college really cost?  authored by Mark Schneider and Lu (Michelle) Yin, looked at the cost of not completing a degree in terms of tax revenues both state and national.


The researchers focused on students who began the 2002-03 academic year and examined the number of students who did not complete bachelor’s degree in six years.  What they found is that there was $3.8 billion in lost income, $566 million in lost federal taxes, and $164 million in lost state taxes.  The authors remind the reader many times that this represents “the losses for only one year and for only one cohort of students.  In short, they represent only the tip of the iceberg of losses.”  The authors estimated that the cumulative loses for this cohort over their work lives is $158 billion in lost income, $32 billion in lost federal income tax payments, and $7 billion in lost income tax payments.


There is also an interactive map where you can look at the financial impact by state,  For Virginia, we had a total income loss of $128.4 million, loss of federal tax revenues of $19.3 million, and loss of state tax revenues of $7.4 million.  At a time of reduced resources in our state, these tax revenues could make a large positive impact on our Commonwealth.


I feel more than compelled to say that the impact of completing a degree has more benefits beyond financial for the student and our community.  We know that individuals who finish degrees are by and large live healthier life styles, are more involved in their children’s education, are more likely to engage in their communities as volunteers, are more civically involved and are more likely to vote.


For me the punch line is that we in higher education have an obligation to find new and innovative ways of reaching adults who have some college and provide avenues to degree completion.  I also believe that our accreditation associations as well as the US Department of Education need to develop outcomes that encourage institutions to serve these adult students.  Relying only on outcome measures such as time to completion does not fit with serving adult students who have stopped out of college for whatever reason.  Many students we work with are on a long term plan to complete their degrees because they have jobs, families, and civic responsibilities, and six-year degree completion timeframes don’t make sense for them. But it doesn’t mean they’ve failed, or that we’ve failed them – we just need a different measure of success.


If we are to address the challenges raised by President Obama and our states of having more college degree completers, there are two steps that we could take. First, we need to rethink some of the outcome indicators of success, and second, states need to look at their funding models for higher education that concentrate only on the 18-22 year old on-campus students and create funding and/or incentives for universities and colleges to serve adult students with some college history.


I believe serving adult students is where we can make the greatest impact related to increasing the number of individuals with degrees.  If we don’t pay attention to serving these students, not only will we loss federal and tax revenue, we may lose an opportunity to positively impact our communities and our legacy: our children.

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