Third Way, a Washington, D.C.-based public policy think tank, has released a report titled "Incomplete: The Quality Crisis at America's Private, Non-Profit Colleges" that details the multitude of institutional struggles within American higher education.
Each year, approximately 2.7 million students enroll in more than a thousand four-year private, non-profit colleges in the United States. Of these students, 1.7 million will take out loans to finance their education. These institutions promise to educate, graduate, and prepare young people for success in the working world.
Indeed, by some metrics, American colleges are fulfilling that promise. The unemployment rate for college graduates hovers at 2.6% compared to 5.4% for those without a college degree. Furthermore, college graduates will earn an average of $1 million more in wages over the course of a lifetime than their non-college educated peers.
Notwithstanding, analysts for Third Way describe a "stunning level of institutional failure in fulfilling" colleges' "mobility promise" to students. The analysts found that nearly half of all students are not graduating, and many of those who complete college are not earning sufficient incomes to repay their loans. The report discovered "levels of achievement so abysmal" that it calls into "question the very promise of higher education at many of these schools."
For example, a typical four-year private, non-profit college graduates only 55% of full-time freshmen within six years of enrollment. Moreover, in only a quarter of these schools did students with federal loans manage to earn a degree within six years. Of those students with loans that do graduate, only about two-thirds of them (63%) earned salaries that exceeded $25,000 six years after earning a degree.
The report also found that schools that fared the best under its analysis enrolled considerably fewer students with federal loans than the typical college. Specifically, only 8.6% of top-quartile schools enrolled more than 38.4% Pell grant students, whereas four out of five Pell students (80.1%) enrolled in the bottom-quartile schools. Forebodingly, schools with high concentration of students with federal loans had the weakest correlation with student success.
The report concludes by offering a few policy recommendations to improve these bleak results. It urges that colleges with large numbers of students who do not graduate pay back some of their federal loans. With "skin in the game," colleges will be incentivized to ensure their students' postgrad success. Schools with graduation rates lower than 67% should develop and implement a plan to increase degree completion. Additionally, schools with high concentrations of Pell students should receive special assistance from the federal government, and high-performing schools should accept many more low-income students.
Finally, the researchers push for "open data." They describe an "opacity of college-specific outcomes" that makes it difficult for students, parents, and policymakers to discern whether a given school is succeeding or failing. Open data will empower consumers and further incentivize colleges to guarantee their graduates' success.
For interested readers, the full report is available online.