How College Quality Affects Graduation Rates


Faculty ResearcherJoshua Goodman, Assistant Professor in Public Policy, Harvard Kennedy SchoolPaper Title First Degree Earns: The Impact of College Quality on College Completion Rates
Coauthor Sarah Cohodes, phd Candidate in Public Policy Harvard Kennedy School

Completion rates at U.S. colleges and universities have dropped off since the 1970s, and Joshua Goodman, an assistant professor in public policy at Harvard Kennedy School, wants to know why. In particular, he wonders whether school quality — which has suffered at some institutions from funding shortfalls that afford decreased resources per student — might play a role in the declining rates.

“It’s a difficult issue to study,” Goodman explains, “because it’s hard to know whether schools with higher graduation rates are doing something different or whether their graduation rates merely reflect the fact that they are attracting different types of students.” The trick is in finding students who look identical in terms of grades, test scores, and other criteria but choose colleges of different academic stature.

Goodman and Kennedy School graduate student Sarah Cohodes realized that the John and Abigail Adams Scholarship Program, which was initiated in Massachusetts in 2004 by then governor Mitt Romney, offered the opportunity they were looking for. And their analysis of information derived from the scholarship provided “the first clear causal evidence on the impact of college quality on students’ postsecondary enrollment decisions and rates of degree completion.” Under this merit aid program, college tuition is waived for Massachusetts high school graduates whose achievement (mcas) test scores place them in the top 25 percent of their school district, provided that they go to colleges and universities within the Massachusetts state system.

The goal of the Adams Scholarship seems unassailable: to keep “the best and brightest” in Massachusetts and, through their presence, to help boost the quality of the state’s postsecondary schools. The program has been successful in raising enrollment in Massachusetts’s public colleges: More than 8 percent of high school graduates who might otherwise have gone to more-selective private or out-of-state colleges were persuaded to attend less competitively ranked in-state institutions.

The second goal, however, appears to be in serious doubt. “Of the 8.3 percent of students induced by the scholarship to enroll at in-state, four-year public colleges, only 2.2 percent graduated within four years,” Goodman and Cohodes write. Their data further indicate that a student persuaded to switch to a umass campus by the Adams Scholarship is much less likely to graduate on time than the average nonscholarship student with similar test scores who chooses to attend a umass school.

“Students are remarkably willing to forgo college quality for relatively small amounts of money,” the authors conclude, given that the scholarship saved students no more than a total of $6,856 over the course of four years. The decision has the unfortunate consequence of significantly lowering a student’s chances of graduating on time and consequently hurting his or her long-term prospects. The lifetime earnings difference between someone who graduates from college and someone who does not typically amounts to about $1 million, Goodman and Cohodes point out, and people going to higher-quality colleges tend to earn more money.

The low on-time completion rates of program participants on its own suggest that recruiting better students has not been sufficient to enhance the quality of in-state schools. The scholarship costs Massachusetts about $25 million a year. The state pays more than $80,000 for each additional in-state graduate, the authors found — money that could most likely be put to better use by hiring more teachers or investing in new equipment and other resources at schools.

One shortcoming of the study, Goodman admits, is that “it doesn’t say what we have to do to make these schools better.” He says, “we’ve proved that there is this problem, but we haven’t yet pinpointed the source of that problem.” He speculates that many students don’t finish their coursework on schedule because they can’t get into the classes they want owing to a dearth of faculty members. He hopes to investigate this hypothesis in his next study but says it probably won’t involve Massachusetts colleges, given that state education officials are not particularly enamored of the findings in his current report.

— by Steve Nadis

The lifetime earning difference between someone who graduates from college and someone who does not typically amounts to about $1 million and people going to higher-quality colleges tend to earn more money.

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