States give failing grade to graduation rates

For decades, college gates have opened wider and wider to the American public, with more whites and minorities attending than ever before. But that expansion is under strain in the face of rising costs and faster growth of minority populations long left behind in the march to graduation.

A new report released Monday from the National Conference of State Legislatures sounds the alarm: For every 100 ninth graders, only 18 will enter college and finish within six years.

"These results simply are not good enough," concludes the report, which was compiled by a bipartisan commission over 18 months.

To help more students earn diplomas, higher education and the states that oversee much of the system need to tackle spiraling tuition, poor college preparation, and the lack of help to keep students moving toward a degree, say experts.

"Colleges have to take seriously the responsibility for graduating the kids they admit," says Thomas Mortenson, an analyst with the Pell Institute for the Study of Opportunity in Higher Education. "And if they don't, maybe they ought to pick up the student loan burden of the people who don't finish."

The report lays much of the blame at the ballooning price of a bachelor's degree, which is more than double the rate of inflation. For example, over the past five years, average tuition has climbed 35 percent, adjusted for inflation, at four-year public colleges, according to the College Board in New York. Inflation rose 13.8 percent over the same period.

Two-thirds of college students must borrow money to pay for their education. Loan debt by student borrowers at public colleges jumped from $8,000 10 years ago to $17,250, according to inflation-adjusted figures from the American Association of State Colleges and Universities.

States such as Indiana, Georgia, and Oklahoma are taking steps to aid college students and their families. And reducing the student-loan rate is an "early action" item on the agenda for the Democratic-controlled Congress.

And there are some positive trends. Graduation rates for those who start college are finally inching up after years of setbacks, says Mr. Mortenson. And the share of Americans with postsecondary degrees is higher across all major ethnic categories.

But it's taking students a longer time on average to complete degrees, and the process is saddling them with more and more debt. "The state is short-changed on its return on investment in these students," says the NCSL report.

States have significant control over higher education – and a real economic interest in its success. Wisconsin spends roughly $1 billion on its university system, which generates $10 billion annually to the state's economy, according to a University of Wisconsin report.

Across the country, higher education boosts tax revenues, cuts dependence on welfare, and boosts community service among other social benefits, according to the Institute for Higher Education Policy in Washington.

Despite the payoffs, states have cut back their commitment to higher education, according to the NCSL, shifting more of the burden to those paying tuition.

And the federal government Pell Grant program "has fallen apart," says Mortenson. If grants had kept up with the rises in tuition, the average Pell Grant would be around $10,000, rather than $4,000, he says. Instead, much of the new assistance for students comes in the form of loans.

The financial burdens appear to be making it more difficult for low-income students to complete a degree. Of students starting at a four-year college in 1996, only 50 percent of those from households making $25,000 or less ended up with a bachelor's degree by 2001, compared with 74 percent of students from households making $70,000 or more.

Working while in school also depresses graduation rates. In those same years, 65 percent of those who did not work graduated, while only 31 percent who worked full time did so.

There are also wide disparities in college attendance and completion rates between ethnic and racial groups, with Hispanics and blacks lagging behind whites and Asians.

The costs of higher education, as well as poor preparation for college, are holding back many minority students, experts say.

To tackle the problems faced by disadvantaged students, several states are tying financial incentives to long-term commitments from students long before they enter college.

Indiana is striking a bargain with its poor and lower-middle-class eighth graders: Maintain at least a 2.0 grade point average through high school, stay out of drugs and alcohol, and take the right set of classes, and we'll pay your in-state college tuition.

Last year, some 15,000 eighth graders enrolled in the 21st Century Scholar Program, and 125,000 have enrolled since the program started in the mid-1990s.

"It's increased a lot of the high-school graduation rates. It's certainly increased the number of low-income students going to college," says Nick Vesper, director of policy and research at Indiana's State Student Assistance Commission in Indianapolis.

Studies are only being done now, however, to determine if the program is boosting college degree completion rates.

Mr. Vesper describes the initiative as an "early intervention program" since it works with kids years before they enter the college-application process to get them the tutoring, mentoring, and course work needed to be successful in college.

Oklahoma offers a similar program. Texas has a variation on the theme: Finish college within five years and maintain a 3.0 grade point average and all tuition loans will be forgiven.

The granddaddy of all state-scholarship programs is in Georgia, which launched its HOPE scholarship program in 1993 and has given more than $3 billion in funds to some 900,000 students.

State legislatures also have control over the spending of public colleges and universities, meaning they could in theory drive down tuition increases by curbing spending. But higher education – both public and private – is under tremendous pressure to provide more amenities to students.

"It's a very careful balance and tightrope that we walk in trying to make sure that we appeal to our market's almost insatiable interest in buildings and resources and technology and accoutrements, and then their absolute need and cry for controlled cost," says Mary Grondahl, head of admissions at the College of Saint Rose in Albany, New York.