Studies Document Growing Economic Importance of Education, Troubling U.S. College Graduation Rates

Recent reports by the Educational Testing Service and The Education Trust have called attention to the economic significance of educational attainment. The ETS study, Standards for What? The Economic Roots of K-16 Reform, focuses on the American "knowledge economy" and on the importance of higher education to economic growth. The Education Trust's study, A Matter of Degrees: Improving Four-Year Colleges and Universities, examines U.S. college graduation rates. Both reports call for new measures to prepare students for--and to help them complete--a college education: They recommend better alignment between K-12 and higher education, improved institutional accountability and assessment, and more equity in college access.

FINDINGS

College Graduation Rates

• By the 1990s, four out of five on-time high school graduates had enrolled in some form of higher education.
• Many students who enter the higher education system fail to get a degree. Even among the students most likely to succeed--those who begin their college career as full-time freshmen in four-year colleges and universities--only six out of ten, on average, receive a bachelor's degree within six years.
• Graduation rate gaps between white and minority students are high. Sixty-seven percent of white students who enroll in college graduate in six years, compared to 46 percent of African Americans and 47 percent of Latinos.
• The odds against bachelor's degree completion for low-income youth are 7-to-1, as opposed to 1.4-to-1 for youth from affluent families. Among those who enroll in college, only 54 percent of low-income students graduate within six years, compared to 77 percent of high-income students.

The Economics of College Education

• The increasing economic disparities in the U.S. correspond roughly to the education gap. Between 1973 and 2001, the average earnings (in 2001 dollars) of Americans with some college, with only high school diplomas, or without high school diplomas declined, while the earnings and employment share of Americans with bachelor's or graduate degrees increased.
• More than two-thirds of U.S. workers in growing, good-paying occupations--office, education, health-care, and technology jobs--have postsecondary education.
• Since 1979, the demand for college-educated workers has risen faster than the supply.
• Over the next decade, four out of ten newly created jobs will require at least some postsecondary education, up from less than three in ten in 2000.

For more of the studies' findings, download the full text of A Matter of Degrees (PDF) and Standards for What? (PDF).

DID YOU KNOW?

• Poor students who score in the highest achievement quartile on tests in the eighth grade are less likely to go on to college than wealthy students scoring at or near the bottom.
• People with four-year degrees now earn, on average, nearly twice as much as people whose highest educational attainment is a high school diploma.
• Over the last ten years, the U.S. has lost its first-place position in college-going rates in the developed world.