College Guide


September 13, 2012 2:00 PM College Completion or College Access?

By Daniel Luzer

The latest trend in public university financing is to give colleges funding based on performance, generally the graduation rate. While different states are proposing slightly different policies, the consensus seems to be that some performance measures are useful for encouraging colleges to educate students well.

Some advocates recommend focusing the Pell Grant program, which provides grants to low-income students to attend college, on completion. According to a recent study by Mark Kantrowitz, founder of and an expert in college finances, however, the focus on college “completion” will likely reduce access to college for many poor students. As he writes:

This paper evaluates the potential impact of proposals to refocus the Pell Grant program on college completion instead of college access, such as proposals to establish a minimum graduation rate threshold on institutional Pell Grant eligibility.

What did he discover? It’s not very encouraging.

Establishing a minimum graduation rate threshold on institutional Pell Grant eligibility will shift significant amounts of funding from community colleges to 4-year colleges. Regardless of the graduation rate threshold, community colleges are always hit the hardest.
A 20% minimum graduation rate threshold on institutional Pell Grant eligibility would cut overall Pell Grant funding at community colleges by more than $5 billion. While 4-year for-profit colleges would also lose nearly $1 billion, the for-profit sector as a whole would experience a net gain of more than $500 million in Pell Grant funding.

Now, granted, this is not the final word on the completion-based Pell Grant proposal. Kantrowitz’s paper appears to have assumed no changes in the completion rate. If there is a 20 percent graduation rate threshold on Pell Grants, students who attend an institution with an 18 percent graduation rate will lose Pell Grant funding. This represents a loss of Pell Grant money, for sure, but those Pell Grants were being used to finance education at a pretty low performing school. Complains along this line (“ you’re hurting poor students!”) were commonly issued by administrators at for-profit colleges when the Department of Education issued new rules for such colleges last year.

But the reason to institute the graduation rate eligibility rule is to encourage colleges to do a better job graduating students. It’s possible new rule about Pell grants could encourage colleges to work a little better. This would, in theory, reduce the number of colleges (and students) who could be cut off from federal financial aid.

Still, Kantrowitz has a good point. Low-income people are the highest-risk college students. They are historically less likely to graduate from any colleges at all.

Reducing the amount of money they can receive in order to go to college is sort of like reducing the amount of Medicaid available to poor people because they have chronic illnesses. Of course we’d like people to be healthier, but a higher rate of chronic illnesses is a characteristic of the people who qualify for the program. The need for people to be able to address health problems is precisely why the program to exist.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer


  • DaveR on September 13, 2012 9:01 PM:

    In an economy where many students, even those with Pell grants, have to work in order to stay in school, 4-year (or even 5-year) graduation rates will go down. There are lots of things that affect grad rates, and many (most) of them are things like the economy that colleges can't control. This is a very bad idea, and particularly bad in a crappy economy.

  • Keith M Ellis on September 14, 2012 1:05 AM:

    If we assume that a college degree is a significant achievement, requiring a lot of hard work, then surely it necessarily follows that some people will fail?

    Alternatively, a school can devote whatever additional resources are necessary to ensuring that struggling students succeed, insofar as it doesn't directly dilute the accomplishment. This is the ideal, of course. Nevertheless, there is necessarily a trade-off.

    While, for example, making an interpreter available for a deaf student is unambiguously the right thing to do and which almost no one will begrudge, people are uncomfortable with study aid for students with ADHD and that's still within the legally defined disability spectrum. What it takes to ensure that almost everyone graduates goes far beyond means that some people receive a disproportionately huge amount of help.

    In practice, though, when (nonprofit, legitimate) schools are pressured over graduation rates, a large amount of adjustment is made on the admissions side, not actually on the retention side. That is, there's numerous correlations regarding those who are likely to do well in college and complete their degree, and it's not that difficult for schools to more strongly weigh those things in admissions decisions, instantly boosting their graduation rates. As this post discusses, one of those correlations is simply socioeconomic status.

    So what we're really talking about here is a trade-off between admission rates and graduation rates — note that it's already the case that schools are judged on their admissions rates by ranking systems, and punished when they're too high. There's already incentive to simply tighten admission standards, limiting opportunity. Putting more pressure on the retention side will primarily result in tightening of admission standards, with only a secondary effort made in actively providing more resources for struggling students. Because one of these is very expensive and very uncertain, and it's not the admission changes. Admission changes are predictable with regard to enrollment and revenue.

    Granted, this doesn't really matter if one or the other of two things is true: either we expect our college educations to be symbolic and not actual intellectual achievements, or we expect that students are already sorted by intellectual achievement before they select and attend college — it's difficult, but almost everyone who attempts it is already been socioeconomically and self-sorted for success at it, with emphasis on the socioeconomic sorting part (as so much research demonstrates). The former may produce an egalitarian society, though one in which education is only pro forma. The latter may produce a society in which education really means something, but will probably not be egalitarian. And, sadly, in truth the society in which we live is a combination of the two — most college education is a meaningless intellectual/skills achievement which, at best, serves some varied and subtle egalitarian functions. At worst, it's neither an education nor egalitarian, but serves as a waste of time and money that only reinforces socioeconomic inequality and injustice.

    I'm strongly in favor of loose admission standards coupled with a challenging, rigorous, meaningful education that includes whatever additional resources required to help struggling students. That's the best of all worlds — one where an education is a real achievement that is truly valuable to the students in numerous respects while being available to most of those for whom it can benefit, even when they may require individualized instruction and resources to graduate. But this is very rare and very expensive. There's almost zero incentive for schools to take this route, and coupling funding to a simple metric like graduation rate only increases the pressure on them to adopt the easiest and most destructive policy that protects their funding. Not