Reduced Resources Linked to Increased Time to Degree

Apr 18, 2010

A recent study published by the National Bureau for Economic Research confirms what many worried parents have already noticed: Students are taking longer and longer to finish their bachelor's degrees. The paper examines where this problem is concentrated and what may be causing the delays.

College Students

Fewer Students Finishing in Four Years

Parents and policymakers have become more and more concerned about the amount of time it's taking students to earn their bachelor's degrees. This isn't just worry over delayed adulthood - more time in college can mean greater debt and less time to build a career.

John Bound, Michael F. Lovenheim and Sarah Turner of the National Bureau for Economic Research (NBER) just published a paper exploring this problem. They found that the data supports anecdotal concerns: Students these days really do take longer to earn an undergraduate degree. Furthermore, the situation is more pronounced for low-income students and those who start school at community colleges and lower-tier public universities. The report suggests that the root of problem may lie in a lack of resources at public colleges and universities as well as skyrocketing college costs.

Economic Pressures

The study's authors relied on data from the National Longitudinal Study of the High School Class of 1972 (NLS72) and the National Educational Longitudinal Study of 1988 (NELS:88). The NLS72 tracked a cohort of high school students graduating that year, and the NELS:88 tracked a national cohort of middle school students who graduated from high school in 1992. Using these studies allowed them to compare large, nationally representative samples of students two decades apart to look for empirical evidence of a shift in time to degree.

They focused their research on the educational outcomes within eight years of high school graduation of those students who started college within two years. Time to degree was measured as the number of years between graduating high school and earning a bachelor's degree.

Proportion of overall students finishing in X years.

Cohort 4 5 6 7 Mean Time to Degree
1972 57.8 83.7 91.8 97.5 4.69 years
1992 43.6 75.4 88.9 95.6 4.97 years

Source: Increasing Time to Baccalaureate Degree in the United States, 2010, National Bureau of Economic Research.

The report shows that there was an overall increase in the median time to degree from 4.69 years for the 1972 cohort to 4.97 years for the 1992 cohort. The proportion finishing within four years, the expected time to complete a bachelor's degree, declined by 24.6 percent.

More telling was the fact that the degree of this increase was statistically related to the type of institution at which a student started college. They split institutions into five categories:

  1. Non-top 50 ranked public universities: The mean time to degree for students at these institutions increased from 4.71 to 5.08 years, and the likelihood of a bachelor's student graduating within four years dropped significantly from 55.5% to 34.7 percent.
  2. Top 50 ranked public universities: The number of students finishing within four years at these schools declined somewhat, but the number graduating within five years did not.
  3. Less selective private schools: There was a relatively small (11.3%) decline in the likelihood that a student at one of these institutions graduated within four years.
  4. Highly selective private schools: The time to degree actually appeared to decline at these institutions. However, the report notes that a small sample size in this category led to a large margin of error, so there may simply have been no significant shift for these students.
  5. Community colleges: The increase in time to degree was most dramatic for students who started their postsecondary education at community colleges. There was a 24 percentage point decline in the likelihood that a student graduated within four years, and a 23.5 percentage point decline within five years. The mean time to degree climbed 0.7 years, over twice as much as the overall increase.

The distribution paints a very clear picture: The less selective an institution, the greater the increase in time to degree.

Education Finance

Financial Challenges

One popular explanation for the increase is that more and more students are entering higher education because a college degree has become more necessary for economic survival in the U.S. In theory, more of these students are under-prepared, and they therefore take longer to graduate. The distribution pattern would appear to support this hypothesis since the time to degree increase happened primarily at less selective college and universities.

However, the study examined college preparedness through a variety of high school test scores and found that there was no net reduction between the 1972 cohort and the 1992 cohort. Furthermore, they noted that those students who did stand out as being under-prepared for college tended to have lower completion rates, dropping out of college rather than just taking longer to finish.

The study's authors also eliminated a couple of other common explanations. Some people have suggested that students may be just earning more credits, which could actually lead to an increase in human capital and wouldn't be as worrisome. But the study found that students aren't earning more credits. There was simply a slower accumulation of credits among students starting at lower-tier public universities and community colleges. The report also notes that students in the 1992 cohort weren't taking more difficult courses, nor were they attempting more double majors.

Institutional resources measured by student-faculty ratios and median expenditures and subsidies per student, for all five categories of school.

Cohort Mean Student-Faculty Ratio Median Expenditures Per Student Median Subsidy Per Student
1972 25.5 $14,318 $10,885
1992 29.8 $15,445 $10,160

Source: Increasing Time to Baccalaureate Degree in the United States, 2010, National Bureau of Economic Research.

The authors' own hypotheses focused on economic causes. They proposed that as some public colleges and universities experienced a reduction in resources, more barriers to graduation cropped up, such as a reduction in course offerings and academic support. At the same time, rising college costs forced many low-income students, who tend to clump at less selective institutions, to attend part-time, also leading to an increase in time to degree.

The study's findings support the suggestion that reduced resources and increased costs is at the root of the increase in the time that students are taking to finish their bachelor's degrees. In order to directly measure institutional resources, the study looked at changes in student-faculty ratios. As the table above indicates, this ratio increased overall from 25.5 for the 1972 cohort to 29.8 for the 1992 cohort. Unsurprisingly, the increase was most dramatic at community colleges and lower-tier public universities.

Although the study's authors admit that student-faculty ratio may be an incomplete measure of institutional resources, it does reflect patterns of spending. Median student-related expenditures climbed slightly overall between the two cohorts, but that's simply because they went up significantly in the private sector. At public schools student-related expenditures dropped while tuition climbed, reflecting a decline in state funding.

Employment and hours worked among those enrolled in college by type of institution.

Proportion of Working Students According to the National Bureau of Economic Research

From Increasing Time to Baccalaureate Degree in the United States, 2010, National Bureau of Economic Research, figure 2 panel A, page 43.

The data also shows that students are working more, forcing many to attend school part-time and prolong graduation. Overall, the average number of hours a first-year college student worked climbed from 6.6 to 13.0. Once again, the increase was greatest among students starting at community colleges, who are more likely to work over 20 hours per week.

The need for students to work more reflects an increase in direct college costs - real tuition (adjusted for inflation) rose 240% between 1976 and 2003 at 4-year colleges and universities. As the same time, financial aid for low- and middle-income family declined. The need-based grants given out by the Federal Pell Grant Program dropped from a maximum grant of $5,380 in the 1975-6 school year to $3,196 in 1995-6, while the proportion of private and unsubsidized Stafford loans climbed.

The rise in college costs concurrent with the increase in college completion time appears to be more than a correlation. Changes in time to degree didn't just differ between institutions - there was also a growing difference between high-income and low-income students. Among the 1972 cohort, there was little difference in time to degree between students of different family incomes. But for the 1992 cohort, only 69% of low-income students were graduating within five years, as compared to 75% of high-income degree students. This gap suggests that increasing economic burdens have had a direct effect on the number of years students take to finish their bachelor's degrees.

Graduates

In light of these findings, the financial effects of taking more time to earn an undergraduate degree become even more worrisome. The situation is becoming a trap that may make it even harder for low-income students to 'catch up' economically - low income status can lead to a longer time to degree, which in turn can lead to greater debt and more difficulty entering the workforce.

The study also provides direct evidence of the detrimental effect that reduced government support has had on higher education. This effect is clearly being felt outside of academia - students who take longer to graduate and enter the workforce are less productive, which will almost certainly have a negative long-term effect on the economy. Luckily, some states, such as North Dakota and Texas, have actually increased their postsecondary education spending in the last fiscal year, reflecting a hope that investing in higher ed will pay off in statewide economic gains.


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