Press Release

Thank you for this opportunity to testify regarding college graduation rates and their implications for the reauthorization of the Higher Education Act.  Since its establishment in 1991, The Education Trust has worked to improve the academic success of America’s young people – especially low-income students and students of color – from kindergarten through college.  As many of you know, the Education Trust has recently published a report on this topic by Senior Policy Analyst Kevin Carey, who is with me here today, and I have brought additional copies of the report for Members of the Committee.

Higher education in America has been and continues to be a tremendous success story.  Collectively, our colleges and universities are unparalleled, attracting students and scholars from all over the world.  Higher education has long been one of the main drivers of opportunity, social mobility and economic progress in our society.  And that promise has been supported through federal policy – through tax-exempt status, establishment of land-grant institutions in the 19th Century, the G.I. Bill after World War II, and Pell Grants since 1972.  Our historical national commitment to education has paid fantastic dividends; the United States has long had the best-educated, most productive workforce in the world.

But that tremendous success has allowed us to overlook a serious and deep-rooted problem in higher education: far too many students who enter our higher education system fail to earn a degree. Overall, only 63 percent of students who begin full-time at a four-year college get a bachelor’s degree within six years, according to the U.S. Department of Education’s Beginning Postsecondary Survey.  Graduation rates are even worse for BA-bound students who begin in a 2-year college.  Moreover, in both types of institutions, completion rates are substantially lower for minority students and students from low-income families.

While approximately two-thirds of White freshmen in 4-year colleges (66.8%) obtain a degree within six years, fewer than half of African-Americans (45.7%) and Latinos (47.3%) do so.  There are also significant differences in completion between students in terms of family income: 77 percent of students from high-income families graduate, compared to only 54 percent for students from low-income families – a 23 percentage point difference.  It is important to keep in mind that these figures represent the outcomes only of students who began as first-time, degree-seeking freshmen in 4-year institutions – that is, the students who are most likely to persist and graduate.

To put these completion rates into perspective, consider that in fall 1995, over 1.1 million students enrolled as first-time freshmen in a four-year college or university.  That means that more than 400,000 students were accepted into baccalaureate-granting institutions intending to get a four-year degree, but still had not graduated six years later.  When we take into account the growth in college enrollment since then – first-time freshman enrollment now exceeds 1.4 million annually – and consider the additional students who begin their college career in community college with the intention of transferring and earning a bachelor’s degree, we can say this with confidence: if current trends continue, over half a million students will enroll in college for the first time in fall 2004, try to earn a degree, and not succeed (at least, not within six years).

Because the number of students entering the nation’s colleges and universities has been rising overall, not much attention has been paid to these low completion rates.  The percentage of high school graduates going on to two-year or four-year colleges and universities increased from less than half in 1975 to almost two-thirds in 2001.  But graduation rates among first-time, full-time students in 4-year colleges have remained stagnant for decades – we are successfully getting more young people to college, but not getting proportionally any more of them through college.

While these disturbing patterns – low overall graduation rates and big gaps between groups – have remained stubbornly consistent, the consequences of not graduating have changed drastically.  People with a four-year degree or higher now earn much more relative to high school graduates than they did 30 years ago, and the gap increases with the level of the degree. By contrast, those who enroll in college but fail to graduate or get an associate degree have made only slight gains.

Unless we change current trends, we will become a society that is even more polarized by class distinctions.  Consider this: only 7% of young people from the poorest one-quarter of American families earn a bachelors degree by age 26, while 60% of young people from the top quartile of family income do so.  College degrees may be the best route out of poverty, but they are a route now for only 7 of every 100 youngsters born to a low-income family.

Beyond the dire negative consequences to the young people themselves, though, these college completion patterns have worrisome implications for our national future—especially as other countries emulate, and even surpass, the United States’ success in higher education access and attainment.  In contrast to almost all other industrialized nations, the US alone has remained relatively stagnant in the percent of working-age citizens with a college degree.  Our dominance in college graduates is waning just as globalization is exerting relentless pressure on the U.S. labor market.

Higher education has an increasingly important role in our future prosperity. As Federal Reserve Chairman Alan Greenspan noted recently: “By the time that the United States entered World War II, the median level of education for a 17-year old was a high-school diploma – an accomplishment that set us apart from other countries … We need to be forward-looking in order to adapt our educational system to the evolving needs of the economy and the realities of our changing society … More broadly, our system of higher education bears an important responsibility for ensuring that our workforce is prepared for the demands of economic change.”

Preparation, Affordability, Practice: Shared Responsibility in Student Success

Three areas on which federally policy is focused play significant roles in student success: preparation, ability to pay, and institutional policies and practices.

Student Preparation

Student preparation has a major impact on subsequent success in college.  A large-scale transcript analysis conducted by the U.S. Department of Education revealed that the rigor of a student’s high school curriculum was the single most significant predictor of college success, overriding the significance of race and socioeconomic status.  Yet, while these patterns are clear in national data, few states have truly aligned their requirements and standards for high school students with expectations for incoming college freshmen.  In practical terms, this means that too many high school students proceed through high school believing that they are being prepared for postsecondary education, only to find they need significant remediation before they can take credit-earning courses.

This lack of clear articulation between K-12 and higher education disproportionately impacts low-income students and students of color, who are less likely to be enrolled in the college prep curriculum and less likely to get clear information on the devastating impact this has on their college aspirations: the data is very clear that students who need remediation in college are much less likely to graduate.

Reauthorization of the Higher Education Act provides Congress with several opportunities to promote better preparation for college and for life.  First, Congress should support state efforts to align the standards for high school exit with those for beginning post-secondary study.  With a relatively small investment, Congress could help link K-12 and higher education data systems which would allow states to significantly advance alignment and articulation activities.  What should states have to do to receive these funds?  Quite simple:


  • K-12 and higher education systems need to agree on common definitions of the knowledge and skills required to begin postsecondary work.
  • K-12 systems need to review state standards and course requirements required for a high school diploma and develop a process to bring them into alignment with the skills and knowledge required to begin postsecondary work.
  • K-12 and higher education together need to agree on common assessments for measuring whether students possess the skills they need, and a curriculum that prepares students adequately for the challenges of postsecondary education.
  • States willing to make this curriculum the default curriculum for all students should receive additional federal financial assistance to provide the professional development that will be required.


In addition, Congress can provide extra encouragement to low-income students to prepare for success in postsecondary education by providing additional financial aid to low-income students who have completed the college prep curriculum.

Money Matters

Providing financial incentives for students to complete a more rigorous college prep curriculum would begin to address another contributor to low graduation rates—the cost of attending college.  But this step alone is by no means sufficient.  The financial burden of paying for college is a huge barrier for many young people.  Low income young people are particularly hard hit, because the relative value of Pell Grants has diminished by 50% since the late 1970s.  Whereas Pell Grants used to cover 84% of the average fixed cost at a public, four-year institution, in 2001-02 they covered only 42% of these costs.  It is hugely important that you act to restore educational opportunities for our most vulnerable young people.


  • Congress should commit to a five-year trajectory to recoup the buying power of Pell Grants.


Beyond providing more help to low-income students, though, it is important for Congress to consider how it might provide stronger incentives to colleges to enroll low-income students.  As college-going increases, colleges often have less incentive to educate more low-income students.  Despite the unique importance of higher education in breaking the cycle of poverty for students from low-income families, increases in student financial aid over the last ten years – at the federal, state, and institutional levels – have disproportionately benefited upper-middle and middle-class students.  So even as the dollars for financial aid have grown, truly low-income students have been asked to shoulder more of the burden of paying for college through loans.  And institutions of higher education should be eligible for supplemental financial assistance for enrolling and graduating low-income students.


  • Both federal grants to individuals as well federal aid to institutions should be designed to better serve the federal priority of increasing the access and success of low-income students.


In addition, the process of simply arranging college financing presents a daunting morass of confusing, sometimes duplicative, programs.  In some instances, the federal government is providing rich subsidies to private lenders without commensurate benefits to the low-income students the programs were established to serve.  Indeed, the President’s budget proposal makes the case that “significantly lower Direct Loan subsidy rates call into question the cost effectiveness of the FFEL [guaranteed student loan] program structure, including the appropriate level of lender subsidies” and cites “evidence of significant cost inefficiencies” in the FFEL program.  These subsidies should be limited and the savings should be redirected to as need-based aid for low-income students.


  • Congress should eliminate excessive subsidies and directly administer a greater portion of federally guaranteed student financial assistance, such as has been proposed by Congressmen Petri and Miller. 


What Institutions Do Matters, Too

Preparation and ability to pay are important, but they do not tell the whole story.  What is becoming increasingly clear is the critical role institutions themselves play in securing the success of their students.  How do we know?  Because right now, institutions that serve similar students with similar preparation and similar family incomes have widely divergent graduation rates.  Our recent report focusing on this issue revealed that some colleges and universities are doing much better than others in graduating their students, even once we account for student characteristics.

This is the first year that institution-level graduation rate statistics have been released to the public, disaggregated by student gender and race/ethnicity.  Examining the numbers closely, we find that some institutions stand out – even after controlling for factors such as institution size, resources, mission, degree programs, and the financial and academic background of their entering students.  Some colleges and universities have much higher graduation rates than other, very similar institutions.

These exceptional higher education institutions range from Elizabeth City State University, a historically Black institution in North Carolina whose student body is predominantly low-income, to Miami of Ohio, a highly selective public university, to the University of California at Riverside, which serves a highly diverse mix of White, Black, Asian, and Latino students, to the University of Northern Iowa, a mid-sized comprehensive institution.

These institutions are different in many ways – their size, location, mission, selectivity, and students vary tremendously.  But they’re similar in one fundamental respect– they consistently and significantly outperform their peers in graduating students.

And the data reveal that high performance doesn’t have to be for some students at the expense of others – institutions like East Carolina University in North Carolina and Binghamton University in New York outperform their peers without gaps in graduation rates between white students and students of color.  We even know that rapid improvement is possible, thanks to the example of the University of Florida, Louisiana Tech, and others that have upped graduation rates for five years running.

This newly available data establishes that what institutions do makes a very big difference when it comes to student success.  This fall, the Education Trust will be making all of this data publicly available through an interactive database on our website.  Visitors to our website will be able to select a given institution and see how it compares to similar, peer institutions in graduating students.  We will be happy to provide Members of Congress and their staffs with information and analysis from this database.

Even as individual institutions have distinguished themselves, our higher education system has, collectively, made virtually no progress in improving graduation rates over the last three decades.  That must change—both for the students and for our country.  Institutions of higher education must be accountable for doing what they can to enable the success of the students they admit.

Leaders in many states are beginning to step up to this responsibility:


  • For example, The University System of Georgia, led by Chancellor Tom Meredith, has begun to study the graduation rates of its 34 colleges and universities, with the aim of setting graduation rate goals, both overall and for student subgroups, for which campus presidents will be held accountable.
  • In Massachusetts, a graduation rate task force has been appointed to find out why the number of undergraduate degrees awarded by 24 state and community colleges has dropped steadily since 1997, particularly in economically depressed areas served by the schools.  Spurred by upcoming implementation of a new state performance funding system, the task force is expected to outline a series of concrete recommendations by December.
  • And it is no coincidence that two of the unusually high-performing institutions I mentioned earlier are from North Carolina.  Some years ago, the UNC system began publishing graduation rates and holding campus presidents accountable for these numbers.


The traditional state role in regulating and funding higher education suggests that states are currently in the best position to create robust accountability systems that hold institutions appropriately responsible for the success of their students.  But given the national interest in tackling this problem, Congress should ask states to design and implement goals and accountability systems for higher education access and outcomes.  While the quality of currently available data and the limited knowledge of best practices advise against a uniform system nationally, it is important that states and systems of higher education begin to see accountability as a responsibility, not a choice.

  • Congress should require states to put in place an accountability system for 4-year colleges and universities.


States should have broad discretion in designing systems that meet the particular needs and characteristics of their institutions, and that fit with systems that have already been established.  But each system should share several common characteristics:  (1) accurate, publicly available graduation rates that are disaggregated by student gender, race/ethnicity, and income status; (2) specific goals for improvement at each institution, including both overall improvement and closing gaps between groups; and (3) public reporting of institutional success in meeting graduation-rate goals.  And states should develop plans to integrate 2-year institutions into their accountability system, once appropriate measure are developed that account for the diverse missions those institutions pursue.

Some states are already well on the way to developing graduation-rate measures that improve on the federally-collected data, by taking into account student mobility between institutions.  These states should be allowed to use these fuller measures as they implement accountability systems.   States that have not yet made the investment in the data systems they need should use the federally-collected measures in the meantime.

Accountability for higher education should also incorporate measures of access and quality of learning, to ensure that increasing student completion doesn’t come at the expense of academic standards or education opportunities for low-income students.  Measures of institutional success must include both the institution’s performance in graduating traditionally underserved students, and it’s success in recruiting and admitting such students.  Too often, success in higher education is measured in terms of increasing the so-called “quality” of the students institutions enroll, which can come at the expense of serving the students whose need for an accessible, affordable, high-quality post-secondary education is greatest.  Congress must help to counterbalance those pressures by recognizing and encouraging those who give access and success equal attention.

Building Even Better Data Systems

We recognize that the institutional graduation rate statistics currently gathered by the Department of Education aren’t perfect, because they don’t fully account for students who transfer from one institution to another.  This is less of a problem than is sometimes suggested, though.  Less than a quarter of beginning 4-year students transfer, and only a third of those students who transfer end up graduating within six years.  As a result, 80% of all students who start college at a 4-year institution and earn a B.A. finish where they began.  The current graduation rate statistics are more than enough to know that some institutions are doing much better than others, and we should act on that information now.

But we can and must do better.  The U.S. Department of Education should be directed to work with states to develop a next generation of graduation rate statistics that appropriately account for mobility and other factors.  Higher education institutions currently submit an array of detailed, time-consuming survey forms to the federal government on a variety of subjects.  All of this data is important, and needs to be collected in the future.  But by moving to a more streamlined, powerful data collection system that allows the tracking of student success at multiple higher education institutions, we could increase the efficiency and utility of the data collection process while reducing the expense in the long run.  We can also answer vital questions that currently lie beyond the scope of the data system, such as: what are the graduation rates of low-income students and students receiving federal financial aid?  How does the success of students seeking different academic majors compare?  How successful are institutions in graduating students, after taking into account those who transfer?

Such a system would also give us much more information about the pipeline of students between 2-year and 4-year colleges.  We currently know even less about the success of our community colleges than our baccalaureate and graduate institutions, despite the fact that 2-year colleges represent a growing sector of higher education, particularly for low-income, minority, and non-traditional students.  A more integrated, powerful data system will change this, providing a more clear picture of success across higher education sectors.

With this new data in hand, Congress can help promote public scrutiny of higher education outcomes by disseminating and drawing public attention to a free, easy-to-understand, uniformly-comparable public information system.  Such a system would allow students, parents, and policymakers to better understand how different colleges and universities compare on crucial performance benchmarks, including access, affordability, and graduation rates, as well available information regarding academics and safety.  Honest, objective, reliable information about the success of individual institutions of higher education needs to become more easily accessible and this data needs to permeate discussions of institutional quality.

Moving forward, we need to know much more about which institutions are doing better, and then we need to learn more about what these institutions are doing.  Gathering much richer data about student progress and success is an important component of any strategy to improve outcomes in higher education.  Better data will help researchers and higher education leaders identify high performers and learn from them.  There are some promising initiatives underway in this regard, such as NSSE, the National Survey of Student Engagement developed at Indiana University.  NSSE and similar projects are exploring the connections between institutional practices and student success.  But in-depth “best practices” studies whose results are transferable from one college or university to another are far too rare in higher education, in part because there hasn’t been enough good data to reliably know who the “high performers” really are, and in part because neither tradition nor policy have created sufficient demand for such studies.

Congress can advance the conversation on both of these issues through the HEA reauthorization.


  • Better data systems should be developed to more accurately identify the most successful institutions and research should be supported to discern the policies and practices that distinguish these institutions from their peers.
  • To spur interest in the colleges and universities that truly stand out in their service to their students, Congress should establish a program akin to the Blue Ribbon schools in the K-12 context.


The federal government should very publicly recognize and reward the colleges and universities that are serving the greatest number of low-income and minority students and demonstrating the greatest success in graduating these students.  Our initial research suggests that these institutions come from all sectors of post-secondary education, from large research universities to small private colleges to minority-serving institutions.  By very publicly identifying the best of the best, and rewarding them for their success, Congress could set a standard against which all other institutions would be measured.

Thank you for this opportunity to testify on this important subject.  I look forward to answering your questions.