Non-Graduating Students Cost Oklahoma Taxpayers Millions

September 4, 2012

For the past 20 years I have conducted research on admissions and outcomes in public higher education and have noted the costs to states for those students who do not graduate. The state-appropriation cost for these students, of course, does not include the costs to students or parents through tuition, fees, books, meals, lodging, and so on.

This number and percentage of non-graduates basically remains constant from year to year. The cost for these non-graduating students is a national scandal, one about which the public has very little knowledge—even though they’re paying the bill.

The majority of senior public institutions have a goal to increase enrollment on the theory that they will produce more college graduates with this additional enrollment. When academic requirements for admission are lowered to increase the number of students on campus, this may not increase the graduation rate and in fact may do the opposite. In most states there are very few academically “college-ready” students who are not already in college.

Nationwide, on average, about 40 percent of students enrolled full-time on senior institutional campuses will never graduate. The cost for these non-graduating students— for faculty, staff, administration, and facilities—is about $12.9 billion each year. (Graduation rate data are from NCES-IPEDS and individual states where available. Cost factors are from SHEEO-SHEF.)

The non-graduation rates range from 66 percent in Alaska to 26 percent in Delaware, Virginia, and Washington. In Oklahoma it’s 50 percent. Only nine states have a worse rate than Oklahoma.

The annual cost to states ranges from $1.38 billion in Texas to $14 million in Vermont. In Oklahoma it’s $312 million.

Many people know about this massive problem, but very few people are doing anything to correct the problem. Legislators tend to cozy up to their alma maters and to the institutions in their districts, as they worry about losing votes in the next election. They tend to believe the story told by the higher-education lobbyists, and rarely look at any institutional data to find out what the truth is. Regents and other higher-education officials also tend to be cheerleaders for the institutions.

Institutions enroll students who are not college-ready because they need these students to cover the costs of the expanded faculty, staff, and facilities to maintain the status quo. Institutions also complain that they must enroll students who are not college-ready because high schools do not prepare them properly. (Indeed, the need for remedial education means that taxpayers are having to pay twice. Public-school districts should be required to pay for college remedial classes.)

But why do colleges enroll these poorly prepared students in the first place? A campus of 10,000 students would be much better at 5,000 students had they had quality admissions years ago and remained at 5,000. Unfortunately, everyone involved with the campus wants it to grow because it builds the prestige locally and statewide. The pitch today is the need for more students so as to ensure more college graduates. That really is a myth, in that these poorly prepared students are not likely to graduate anyway. If they do graduate, what do they know? There is much evidence now that students in college and those who have graduated didn’t learn much while in college.

Moreover, those students who have lower academic admissions profiles are more likely to have to take out loans to subsidize their college costs, only to find they cannot adequately do the academic work required. They are more likely to drop out. This only adds to the debt crisis many students face in trying to pay back college loans they should not have incurred in the first place. The institutions are not honest with these academically borderline students when they are enrolled.

Higher education, as I have said elsewhere, “is the last vestige of the medieval fiefdom of ancient Europe.” The nobles who work in higher education do not want any outside interference. Not even from those who pay the bills.

An emeritus professor at Erskine College, Harry C. Stille is president of the Higher Education Research/Policy Center, Inc. He served in the South Carolina legislature from 1992 to 2004. He may be reached at 864-379-3080 or stillehr@live.com.

By Harry C. Stille

More College Graduates? Yes, and No

Some of Oklahoma’s political leaders and higher-education officials are pushing for more college graduates.

I think it’s always healthy to be skeptical of central planning. We should take with a grain of salt the latest “five-year plan” from politicians and bureaucrats—especially those with a vested economic interest in the subject. In a free society, students and their parents will determine whether Oklahoma needs more college graduates.

At the very least, the central planners owe it to taxpayers to be more precise. Do they think Oklahoma needs more engineering graduates? Accounting graduates? Those seem plausible enough, but do they really think we need more anthropology graduates? Art history graduates? Women’s Studies graduates? I would be skeptical of such claims, as would the recent sociology graduate with $50,000 in student-loan debt who is delivering pizza and living with his parents. What if he had sunk that $50,000 into the entrepreneurial venture he had been considering?

Indeed, it appears to me that we’re already turning out more college graduates than the labor market needs. The federal Bureau of Labor Statistics informs us that the U.S. now has 115,000 janitors, 83,000 bartenders and 323,000 restaurant servers with bachelor’s degrees. Here in Oklahoma, “the low demand for college graduates is not expected to change anytime soon,” OCPA and the Center for College Affordability and Productivity pointed out last year. “The state’s own labor-market projections, forecasting out until 2018, foresee anemic total growth in fields that require at least a bachelor’s degree. Of the projected top 20 fastest-growing (by percentage change) fields, only two require a bachelor’s degree. On an annual basis until 2018, it is forecasted that for every one job open for college graduates, there will be 4.55 jobs available for non-college graduates.”

In the spirit of “truth in advertising,” higher-education officials need to be candid with students and taxpayers. Yes, we need more of certain kinds of graduates, and those graduates will indeed earn much more over a lifetime. But not every college degree ensures prosperity. In fact, according to Bloomberg BusinessWeek, at some Oklahoma universities the return on investment is actually negative.

—Editor