Graduation rates make a difference

The American Enterprise Institute (AEI) is releasing a paper today confirming what nearly every educational consultant or guidance counselor providing college advice already knows—graduation rates matter to parents.

 

One of my favorite jaw-dropping moments with families I am advising inevitably comes when I disclose that the average six-year graduation rate for US colleges and universities currently stands at about 53 percent. Six-year? Fifty-three percent? Whatever happened to finishing up in four years?

 

That’s when I open my well-worn copy of the College Board Handbook or log-on to the College Navigator website to show them how well the colleges on their child’s list perform with regard to this key indicator. The reaction is predictable and falls along lines suggested by the AEI.

 

In short, the AEI found “colleges that admit similar students often have widely different graduation rates, and far too many fail to get a majority of their students across the finish line” and concludes that “providing graduation-rate information increased the probability that parents would choose the institution with the higher graduation rate by about 15 percentage points.” In other words, performance counts.

 

Graduation rates are hardly secret. The College Board knows them, and the US Department of Education publishes them. Yet part of my “value added” as an educational consultant is that I reveal them.

 

Not surprisingly, graduation rates correlate nicely with generally-accepted views of quality. For example, the University of Virginia and Georgetown University—both considered first-rate postsecondary institutions—share six-year graduation rates of about 93 percent.

 

But it’s not just the current graduation rate that matters. The rate of improvement or upward trend should also count.

 

And those local colleges and universities working to improve graduation rates are producing great results. For example, the University of Maryland has improved its six-year graduation rate from 71 percent in 2003 to 82 percent in 2009, while in the same time period George Mason University improved from 49 percent to 64 percent—15 full percentage points.

 

So after all the research on parental reactions to graduation rates, what does the American Enterprise Institute conclude? “[P]arents can and will evaluate colleges and universities and choose higher-performing ones, provided they have access to indicators of college performance that they can use.”

 

The AEI goes on to suggest that the US Department of Education could require all colleges participating in federal student aid programs to report their graduation and retention rates clearly on admissions and financial aid correspondence with students.

 

This recommendation won’t go over too well with colleges that feel the current methodology for computing these numbers, which fails to take into account transfer information, would unfairly prejudice families against their schools.

 

But short of ordering a massive retooling of marketing materials to include data that might not always be too flattering, it’s easier to ask someone who either knows the answer or knows where to find and how to explain it. And that’s where good college advising comes in.

 

For more information on the study or to download a copy of the complete report, visit the American Enterprise Institute website.