Most significantly, community college three year-year graduation rates average in the low 20 percent range, with many colleges graduating far fewer than this average. In 2009, the last year for which the federal government has reported data, close to 400 community colleges had graduation rates of less than 15 percent. For the minority of students who do not receive an associate’s degree, there are labor market rewards in terms of higher salaries, yet most students do not complete their studies and suffer economic losses compared to what they would have earned as graduates.
Completion Matters: The High Cost of Low Community College Graduation Rates Mark Schneider and Lu Michelle Yin, American Enterprise Institute
As if our schools didn’t have enough problems to worry about, Mark Schneider and Lu Michelle Yin, two staff researchers at the American Enterprise Institute (AEI), give us another. In a new AEI research report the authors discuss the costs and consequences of low community college graduation rates and what to do about them. Schneider and Lin found that nationally, only 1 in 4 community college students graduate, as compared to 3 in 5 students at four-year schools. They estimate that cutting the dropout rate by half would generate signficant gains: $30 billion more in lifetime income and create an additional $5.3 billion in total tax revenue. Their suggestions as to how are worth exploring. But we wouldn’t get into that here.
How does this problem impact North Carolina? Not well. According to the North Carolina Community College System, only 48 percent of students return to North Carolina Community Colleges for their second year of study. Things are even worse for non-traditional students – a growing population. For students who have at least two “at risk” factors, less than 15 percent complete their programs.
According to Schneider and Yin, cutting in half the number of community college dropouts in North Carolina, could bolster wages by another $74.6 million annually. The higher wages would add $5.2 million in additional state taxes and $11.2 million in federal taxes.
Schneider and Yin’s piece is worth a closer look — not because it provides a way to bolster tax revenue — but because the solutions if offers can help to improve individual lives and make the state a better steward of tax dollars.