Does Money Trump Academics? No.

by Dr. Watson Scott Swail, President & Senior Research Scientist

I received an email from EAB this morning that proclaimed “Financial pressure is the top reason that students leave college,” complete with a link to how technology can help.

Then I paused.

I’m not going to say that EAB is wrong on this. Financial pressures, let alone ability to pay, are significant barriers to postsecondary access and success for students, especially those who are Pell-eligible. But not only them. Middle-class and other groups have financial challenges as well. For me, I’ve been researching issues related to retention, persistence, and completion for over 25 years. Numbers and data can sometimes get confusing. Student backgrounds, institution type and sector, attendance status, financial aid, etc. There are a lot of variables to toggle which impacts the retention and persistence of students in the postsecondary arena.

I will say that I do not believe that financial pressure is the ultimate and overarching reason that most students leave college without a degree. I think it is the second most prominent reason. After considerable research, I’ve always placed academic ability and preparation as number one, financial issues number two, and social/familial issues number three. There are other factors, but these are the three buckets that seem to be at root for most leavers. I’ve written extensively on these issues and you can find specific analysis on these issues here. In fact, we published a book of student success-related Swail Letters last year. Click here for that piece.

For this Swail Letter, I decided to go back into the recently-updated Beginning Postsecondary Student (BPS) database from the National Center for Education Statistics (NCES), a division of the US Department of Education. I thought I would take a look to see how the various factors played out. Now, to be fair, this is not a multiple regression exercise. It is simply an analysis based on several variables for comparison. Due to the issue of complexity versus clarity, I focused this analysis on the academic outcomes of full-time students who entered college at a four-year public institution. The outcomes here are based on their initial institution only, meaning that if we included all academic outcomes at other institutions for students, the numbers would increase somewhat. However, I picked first institution only for simplicity. These students entered postsecondary studies in fall 2011 and were followed up in June 2017, providing a full six years of potential enrollment after initial college enrollment. Here are my brief findings.

Overall, 63 percent of full-time students who started at a four-year public institution graduated from that institution with a bachelor’s degree within six years of matriculation. Thus, almost two thirds of entering students were successful at a BA level. Students who were more affluent graduated at much higher rates than their lower-income peers. For instance, 79 percent of students from the top income bracket ($107k or higher) earned a BA compared to 47 percent of low-income (< $30k) students.[1] So, without doubt, money matters, assuming income is a proxy for “financial pressures.”

And while income and ability to pay matter greatly, so do many other factors. We talk a lot about both human capital and educational legacy in the chances of opportunity and success in postsecondary education. For instance, the parents’ highest education level (legacy) has an indirect impact on college going and completion for their children. For students whose parents earned a high school diploma but no higher, 45 percent earned a BA. Comparatively, students whose parents earned a BA graduated at 69 percent rate. And those whose parents had a doctoral degree graduated at an 80 percent rate. Educational legacy matters in part because it changes expectations during the formative years.

Prior academic outcomes for students as measured by their high school outcomes. Seventy-six percent of students who earned a high school GPA of 3.5 or higher earned a BA within six years at their original institution. This compared to 63 percent for those between 3.0 and 3.4, 50 percent for those between 2.5 and 2.9, and 40 percent for those between 2.0 and 2.4. Thus, the high school GPA of students predicates their future performance to a degree. Those with higher GPAs are much more likely to have had issues including stronger educational legacy, access to better teachers, better learning environments. For instance, students who took at least one AP course in high school had a 68 percent BA graduation rate compared to 53 percent for those who did not participate in AP. We can write a book on how these issues interact but we won’t get deep into that tangled discussion today.

The GPA issue follows students into college. For instance, 88 percent of full-time, four-year public students who earned a cumulative GPA of 3.5 or above graduated with a BA within six years. This compares to 78 percent for those between a 2.9 and 3.4, and 52 percent between 2.2 and 2.8. GPA matters in high school; it matters in college. Those with higher GPAs in either or both places have a much higher propensity to complete their degree at their initial postsecondary institution.

One other interesting variable that I appreciate from the BPS database is about risk factors. NCES defines risk as having one of the following attributes:

  • part-time enrollment
  • delaying entry into postsecondary education after high school
  • not having a regular high school diploma
  • having children
  • being a single parent
  • being financially independent of parents
  • working full time while enrolled.

The data show that three quarters (74 percent) of students with none of the above risk factors graduate with a BA. The addition of a singular risk factor drops that rate to 54 percent, and only one third (34 percent) of those with 2-3 risk factors graduate. Put another way, 79 percent of those with no risk factors earn some postsecondary degree compared to only 49 percent of those with 2-3 risk factors. Risk matters.

What we know is that there are many reasons students either succeed or fail in postsecondary education. Money is surely a prime factor, not only in ability to pay, but by creating access to quality educational opportunities from Pre-K through to high school graduation. Ultimately, I believe, based on thorough analysis over the years of various databases, that academic ability trumps these other factors, even though they are all intertwined to some degree.

The question then becomes, “what can colleges do about it?” It’s a tough question. On one hand, I’ve consistently said that once you enroll a student, you have a moral and ethical responsibility to do everything you can to get them out the other door, successfully. This is easier said than done. Too many institutions let in students who truly do not have the academic wherewithal to succeed. It isn’t from lack of heart or willpower. It is, more simply, that they are so far behind compared to their peers that the chance of catching up and staying on time in their classes is too much to expect. And they drop out. We see it. Daily. Students start by getting behind, then withdrawing, and before you know it, they have 5-6 courses that they withdrawn from over two years. It happens.

For students who are on the academic bubble, we do a relatively poor job of identifying their frailties early enough during their first semester of study. The pressure of academics very quickly overcomes students. For many, they are gone before anyone even notices. Then we have a statistic on our hands, let alone a life with a detour that can take a while to get back on track. The real challenge are the students who make it through the first year into the second year of study, but are behind and not earning credits at an appropriate rate. They are spending financial aid, stacking up loan obligations, and not getting significantly closer to the goal of a bachelor’s degree. These are our “swirling” students and they are a major problem for institutions. Thus, institutions need to find these students and either give them the help to achieve or cut them loose. There is no sense keeping students in college who aren’t going to make it. People don’t like to hear this, but it’s true. A university education really isn’t for everyone. I take some flak because everyone should have the opportunity to pursue their dreams. I agree and support that sentiment. But we fail too many students way too early in the education pipeline that once they get through a mediocre high school education, they aren’t going to make it in college. That’s our fault in kindergarten, and we aren’t going to fix it by letting them enroll in an institution that is far beyond their capabilities. For these students, we have to have alternative pathways that allow them to catch up and mature. The two-year system helps with that immensely. If students can achieve at the community college, they typically then can achieve in a two-plus two-type of program. But they can’t take a big bite at once.

The medicine is sometimes hard to swallow, but after over half a century of opening the door of higher education, we remain with massive gaps in achievement. This wasn’t appropriate back in the mid-1960s, but at least then the price of college wasn’t overwhelming. Now it is. The cost of failing in higher education is a heavy burden for students and families. That is why, for me, I think local, state, and federal government agencies and their respective policymakers have a responsibility to do more earlier in the pipeline. By middle school the damage is largely done.

The Access Agenda carries with it a double-sworded edge. There is the very positive side of helping those who come from low-income and first-generation families gain access and success in postsecondary education. But the other side we sweep under the rug too often, by enrolling students only to see them flounder. They often say that drowning is a very quiet occurrence. People often don’t notice because the person succumbs almost in silence. It can be like that for many students, too.

We need better life preservers, folks.


[1] Based on 2012 dependent students parents’ income.

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