Importance of Graduation Rates in College Choice

Prospective college students ask a good many questions as they narrow down the list of schools to which they will apply. Remarkably, few ask the one question which often turns out to be most important:

“Can I graduate from this college in four years?”

For students at America’s premier colleges and universities – Ivy League schools, elite small liberal arts colleges, the handful of prestigious state universities – graduation in four years remains the norm. But at most American colleges and universities, there’s a strong chance that an entering student will not graduate in four years – or five, or even six.

Indeed, the odds are nearly even – 53% to 47% – that a student now sweating out the application process will not graduate at all, or at least, not in the foreseeable future.

There are many reasons for this emerging trend, but the impact is clear. Billions of dollars of family savings – and billions more in public funds – are being wasted annually on unnecessary extra years of college for students who fail to complete a four-year undergraduate program on schedule.

The most obvious impact of this trend falls upon students and their families. After decades of scrimping and saving to make college possible for a child, many a family finds that – after four years of ever-rising tuition and other costs – their child is still far from the goal of graduating. Finding the money to continue the pursuit of that goal can place an enormous strain on family finances – and often, on parent-child relationships.

Failure to graduate in four years also imposes what economists call an opportunity cost. A student who completes college in four years will ordinarily begin earning a decent living in the fifth year. A student still in college for a fifth year must not only continue paying tuition and other costs – she will also miss the chance to earn a year’s income at a level possible for a college graduate.

And this lost year is usually a lifetime loss. Extra tuition and fees will never be recaptured. A year of unearned income will never be regained. Nor will that first year of employment experience or that missed opportunity for a first promotion. The five-year or six-year graduate will start behind her four-year classmates – and trail behind them for years, if not for life.

We might add, of course, the billions of tax dollars – in the form of subsidies for in-state students, government-financed grants and loans, etc. – which Americans waste on unnecessary years of college for students who fail to graduate on time. These tax dollars represent an indirect cost to every family and individual in the land.

But for prospective college students, the possibility that they will end up paying for five or six years of college – instead of four – is of immediate importance.

Or it would be, if students and their families were aware of the facts.

Solid data are available on how well American colleges do in guiding their students through to graduation. Under the Student Right-to-Know and Campus Security Act, passed by Congress in 1990 and signed by President George H. W. Bush, colleges are required to submit data on graduation rates for publication by the National Center for Education Statistics. In a fairly major concession to the educational establishment, Congress mandated that these reports measure the percentage of entering students who graduate in six – not four – years, but the data are still useful.

These raw data have been used to produce reports of real value to prospective college applicants. For example, the American Enterprise Institute published a 2009 report comparing six-year graduation data from 1300 colleges and universities. Comparisons were made both within and between six categories of schools – from “most competitive” to “non-competitive” – created by Barron’s Profiles of American Colleges. An appendix to the AEI report lists all 1300 schools, by state, with their six-year graduation rates for the entering class of 2001.

A prospective college student looking through the AEI report will be astonished to learn that there are accredited colleges in the United States which manage to graduate as few as 8% of their entering class – within six years. The overall average is better – around 53% – but the fact remains that nearly five of every ten students entering a college in 2001 did not graduate from that school within six years.

Needless to say, all statistics have limitations and are subject to interpretation. For example, the Federal statistics do not account for students who transfer from one college to another.

Further, there are many factors – some valid – which prevent students from graduating within the nominal four years. Some students experience health or personal problems. Others must withdraw because of family problems, including financial problems. Some find that they are not ready for college and make the rational decision to enter the working world, postponing higher education for later in their lives.

On the other hand, there are students who fail to graduate on time because of personal choices. Some students change majors, or decide to double- or triple-major, which can delay the process of accumulating necessary academic credits. Such choices are not always the fault of the college, though rational policies regarding the declaration of majors and effective student counseling can dramatically reduce the number of students who do not graduate on time.

But in these times of budget cuts, an increasing number of college students are unable to graduate through no fault of their own. Courses required for graduation are not offered in the proper sequence, or are allowed to close while excluding students who need those courses to make progress toward graduation. Often, colleges and universities seem utterly unconcerned about the extra semesters or years these administrative decisions impose upon their students.

And rationally, there is no real reason why they should. Colleges generate revenues from tuition, fees, and other charges – as well as transfers of Federal and state money for tuition assistance and in the forms of loans and grants. Once a student has enrolled, he becomes, in effect, a captive source of revenue for his school. If budget cutbacks or bureaucratic red tape or incompetence force students to hang around for an extra year or two, there is usually no adverse consequence for the school.

College applicants should bear these realities in mind, gather data, and ask appropriate questions. Since, by law, every college and university must annually report its six-year graduation rates, it stands to reason that data on four- and five-year rates must be in a file somewhere. Prospective students should ask for those figures, as well as for credible assurance that they can expect to graduate on time.

Nor should they rely upon the colleges alone for information. Recent graduates and current students will often have their own experiences – or those of classmates – to report. Talking with those who know a school well could raise warning flags, or furnish reassurance, concerning on-time graduation.

Once they have enrolled, every new college student should work out a plan for staying on track toward graduation. He should carefully go over all graduation requirements with an advisor and, if any questions arise, take those questions up with an official of sufficient rank to sign off on his plan, assuring him that it meets the school’s requirements.

If a student’s major department is notorious for failing to schedule required courses in the proper sequence, a student should investigate the possibility of taking key courses during the summer, at their own school or elsewhere. If transfer credits are necessary, she should also look into her school’s policy about accepting such credits for required major courses.

If courses in a student’s major tend to fill up early, he should meet with the professor and gain a promise that he can add the course if necessary, even if the class is officially full.

If these steps seems overly assertive, students should remember that the costs of failing to graduate on time fall entirely upon them and their families – not their schools. Until this situation is reformed, it is incumbent upon every student to protect her own interests – and upon every applicant to inquire into the graduation rates of every school to which she applies.

A school which cannot assure a student of on-time graduation may end up costing far more than a nominally more expensive school which can.

That’s why the question of graduation rates might prove to be the most important question of all.


American Enterprise Institute, “Diplomas and Dropouts: Which College Actually Graduate Their Students(and Which Don’t)”, by Frederick M. Hess, Mark Schneider, Kevin Carey, and Andrew P. Kelly (1990).

USA Today, “4-year colleges graduate 53% of students in 6 years”, by Mary Beth Marklein (June 3, 2009).