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Looking to Graduation Day

Student aid legislation in Congress does a lot for increasing financial aid, but it also signals a new federal focus on getting low-income students to graduate.

The Student Aid and Fiscal Responsibility Act (SAFRA), which passed in the House in September and has the support of the White House, has been getting a lot of attention for addressing the cost of college, primarily because it aims to both increase the Pell grant and switch to more cost-effective direct lending. And it couldn't come at a better time. Tuition has been increasing at twice the rate of inflation since the 1990s, while the Pell grant doesn't buy nearly what it used to—it covered half the total cost of a public university in the mid-1980s but today it covers less than a third. By 2007, the College Board estimated that nearly a quarter of students were paying $21,000 a year or more in tuition, and costs clearly have continued rising since then.

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But while cost is important, in a fairly radical move, SAFRA also begins to put a new federal focus on the under-discussed issue of college completion rates. Though more young people are attending postsecondary education than ever—Pew Research recently reported that nearly 40 percent of 18-24 year olds are enrolled in a two- or four-year institution—graduation rates aren't increasing at the same pace.

Graduation statistics are particularly bad for low-income students and under-represented minorities (like blacks and Native Americans), according to current data from the National Center for Education Statistics (NCES). In 2009, more than three-quarters of 24-year-olds from high-income families had attained a bachelor's degree, whereas just 10 percent of 24-year-olds from low-income backgrounds could say the same. And according to the NCES, while just over half—about 58 percent—of students who enrolled in a four-year institution in 2000 graduated within six years, African-American students have a graduation rate of 42 percent.

The version of SAFRA the House passed would set aside nearly $3 billion to fund college completion efforts. Additionally, the legislation puts money into programs partnering community colleges with businesses, thus creating job training and credentialing programs designed to address local workforce needs. It also outlines funding for free online courses for job and career training.

The Department of Education plans to distribute the money to college completion efforts primarily through the College Access and Completion Incentive Fund (CACIF), an organization that would dole out competitive grants to state-level programs focusing on improving completion rates for low-income and first-generation college students. For instance, the College Access Challenge Grant Program (CACGP), which will be expanded through SAFRA, currently funds a program in the University of Wyoming state system that provides additional, need-based aid to low-income students. CACGP plans to distribute $300,000 additional grants and additional financial aid counseling to Pell grant recipients, all in the hopes of improving graduation rates.

Regardless of what SAFRA looks like when it leaves the Senate, 24 state university systems from around the country have already begun the Access to Success Initiative, which seeks to study ways to effectively narrow racial and economic gaps in graduation rates. The two dozen state systems hope to cut their graduation gaps in half by 2015.

As part of the initiative, Access to Success came out with a baseline study, conducted by the Education Trust, that shows alarming gaps between high- and low-income students, as well as between white and black students. Low-income students who begin at two-year institutions have a particularly low bachelor's degree attainment rate, the study's data show, with only 12 percent going on to a four-year school. And of those students who transfer, only about half graduate with a bachelor's degree, according to Jennifer Engle, assistant director of higher education at the Education Trust and one of the report's authors. "Only about 7 percent of minority students who enter the two-year colleges in our systems earn bachelor's degrees within 10 years," she says.

The report was careful to note that "some systems and institutions are more successful than others in helping students progress to graduation, both overall and with low-income and minority students." Engle says that in her previous work at the Pell Institute, she found that the schools that did best at narrowing graduation rate gaps were ones that provided a coordinated effort of increased financial aid, specialized counseling, and leadership from the university system's administrators. The schools that did the best were ones where "there was a leadership and a coordination there that really amplified their efforts beyond an individual program," Engle says.

Kevin Carey, policy director at the Education Sector, analyzed similar programs in a 2008 report that focused in increasing graduation rates among minorities. He looked at a program called the Center for Academic Retention and Enhancement (CARE) at Florida State University. The program offered extra assistance to first-generation and more at risk college students, from financial aid application assistance to specialized counseling. At the end of six years, FSU saw a 72 percent graduation six-year rate among African-American students—its highest ever.

For years, policymakers have treated college access and college completion as two sides of the same coin—getting students through initial enrollment barriers would be enough to ensure they would be ready to graduate four years later. But we are beginning to see that even though access is increasing, graduation rates are stagnant. If the parts of SAFRA targeted toward completion are to have any effect, than its implementation will have to take these factors into account.

One of the reasons why access cannot guarantee completion is that many students will enroll for a short period of time, only to drop out for academic, social, or financial reasons. Past attempts to solve this problem have focused on the first year or two, operating under the belief that getting freshmen to return for their sophomore year was adequate. But research presented from Crossing the Finish Line: Completing College at America's Public Universities, a qualitative study of graduation patterns for hundreds of thousands of students in the entering class of 1999, shows that withdrawals are a concern for students throughout their entire postsecondary career. According to the research, "nearly half (44 percent) of all withdrawals occur after the second year," with a fairly regular and steady increase each semester.

Engle noted that oftentimes the problems of insufficient aid is an important factor for students who fail to graduate. Institutions often "front load" their financial aid in the first year. "So for those students who don't leave after the first year, they might get a nice grant package for the first year,” says Engle, “but the second year all they get is loans.”

Solving the withdrawal problem will do a lot to help students that have already enrolled in a college or university, but it does nothing to address students’ own aspiration problems. Every year, there are tens of thousands of otherwise qualified students who never apply to a college or university, or elect to attend a school that is easier than the one their academic qualifications dictate they should attend (i.e. a high-achieving student who enrolls in a community college instead of a selective four-year institution). While some students may decide to enroll in the easier school because it would improve their chance of graduating—a process known as undermatching—picking ease over rigor may actually have the opposite result. Graduation rates at the least selective institutions in the Crossing the Finish Line study had a graduation rate of 58 percent among black men with a GPA of 3.66 and above. By contrast, black men with a GPA of 3.66 or higher who pick a school that is above their academic qualifications had a graduation rate of 82 percent.

These individual-level desires matter because they occur at a large scale. Research presented at an October College Board conference found that each year there are 30,000 low-income students who have very good academic credentials but never apply to a school that evenly matches their abilities. According to the Crossing the Finish Line data, it found that undermatching occurred at a rate of 40 percent in a data set of North Carolina high school graduates. If SAFRA’s completion efforts are going to have their desired effect, they must be sure to address these pre-college enrollment decisions, not just focus on those who have already walked through the doors.

SAFRA advocates like to glowingly speak about how the bill represents the greatest expansion of aid since the G.I. Bill. Larger and more reliable Pell Grants for students will certainly alleviate many of the financial concerns they face. But without the added focus on completion, these billions of dollars will be buying nothing more an unfinished degree.

Kay Steiger is the editor of CampusProgress.org.

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