the caveat to whether college is worth it

“Is College Worth It? Clearly, New Data Say.” So reads the headline, and what follows does not surprise:

The pay gap between college graduates and everyone else reached a record high last year, according to the new data…Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree. That’s up from 89 percent five years earlier, 85 percent a decade earlier and 64 percent in the early 1980s.

You hear this a lot. And at one level, it’s absolutely true. But what the payoff-to-college headlines often miss is that it’s graduating from college that is worth it. The NYT’s own chart implies this, though the piece never makes the connection. The earnings of people with some college have hovered around 1.1 times those of HS grads since 1975, while earnings of those with a 4-year degree have increased from about 1.45 to 1.8 times those of HS grads.*

What doesn’t help, and in fact makes things worse, is taking out loans to go to college but then failing to finish. Your income goes up almost none, but now you have debt. About 44% of students who start a four-year degree don’t finish it within six years. I couldn’t find quick numbers on the percentage of dropouts who have loans, and of what size, but 29% of those who borrowed between 2003 and 2009 dropped out by the end of that period.

The problem is that the policy takeaway of “College is a great investment!” is 1) let’s get more people into college and 2) let’s get more people to finish college once they start. But the people who aren’t now starting college after high school — the ones we might get to enroll — look an awful lot like the students who drop out with debt. It seems entirely possible that a heavy focus on increasing enrollment would create more indebted dropouts than successful graduates.

The second part makes more sense. Here, though, the incentive is usually to improve graduation rates by making it easier to graduate, rather than by improving students’ academic performance. Assuming that the point of college isn’t just to keep people off the labor market for a few more years, we need ways to offer students support while raising standards.

But how do we actually do that? I don’t have a great answer. One possibility might be to push community colleges and four-year programs in different directions. Keep community college as cheap as possible. Let people try multiple times if they need to, or move in and out as their life circumstances change. Ignore completion rates entirely.

Then for the four-years, raise standards — on both the front end and the back end. Accept that a four-year degree comes with a certain level of indebtedness for most people these days, and that most people will be worse off if they start (and borrow money) but don’t finish. Don’t emphasize “access” for students who are likely to end up in that position — send them to the low-cost option and tell them to prove themselves before they take on big debt. Provide support for the students you do accept — financial, academic, and to help with the kinds of small but potentially derailing crises students of modest means are likely to encounter. And then hold colleges accountable for completion rates.

I don’t really like this option. It limits access while not actually fixing the incentives to water things down. Given the current loan-driven, state-disinvestment model we’ve got, though, I don’t see better ways to minimize the number of dropouts with debt** while increasing, rather than reducing, the rigor of college.

* The income of HS grads, interestingly, has remained basically flat during this time — dropping from $33,500 to $32,600 in 2012 dollars. See data here; I adjusted for inflation. I expected it to drop more — but changes in the demographic mix may explain that.

** Doing something about for-profits, which have terrible numbers on this, would certainly help.