Dive Brief:
- College earnings data often only includes students who finished their programs, but excluding those who didn’t complete their credentials could result in policymakers overlooking important information, a recent report from the Urban Institute suggests.
- The median earnings of graduates are a key piece of the gainful employment rule, which ties federal financial aid eligibility to debt and earnings outcomes for some programs. But the rule doesn’t account for noncompleters.
- However, some types of institutions have significantly lower median earnings when considering their noncompleters alongside their graduates, including community colleges and for-profit institutions that predominantly award bachelor’s degrees, researchers found.
Dive Insight:
In the new report, researchers argued that “excluding noncompleters in earnings metrics can create a blind spot in accountability policies, particularly if institutions have high dropout rates.”
Median earnings at for-profit institutions that predominantly award bachelor’s degrees would decline from $49,120 to $31,690 if noncompleters were included, they found.
At public institutions, median earnings would decline from $40,907 to $32,694 for those that primarily award associate degrees and from $39,021 to $30,633 at those that mostly award certificates.
Though students at public and nonprofit institutions generally have higher earnings than for-profit attendees, these divides are sometimes narrowed or reversed once noncompleters are included.
For example, median graduate earnings at public institutions that predominantly award associate degrees are higher than those at similar for-profit institutions by a few thousand dollars. But that relationship is reversed when noncompleters are included.
Researchers used data from the federal College Scorecard to estimate median earnings several years after enrollment.
The Education Department’s gainful employment rule, which is set to go into effect this summer, holds institutions to an earnings standard.
Under the rule, career education programs must show that their graduates typically earn at least as much as than the average adult with only a high school diploma. Programs that fail the test risk losing eligibility to receive federal financial aid.
The earnings of noncompleters are not included. The rule will apply to all programs at for-profit colleges and nondegree programs at all institutions.
A bipartisan bill to extend Pell Grants to programs shorter than 15 weeks would require programs to pass a similar metric to be eligible to receive the new funding.
Jason Delisle, a nonresident senior fellow at the Urban Institute’s Center on Education Data and Policy and co-author of the report, said he believes including noncompleters in earnings data may be a good policy decision.
The policies are often built around determining whether the government is getting its money’s worth and if a college is worthy of receiving taxpayer support, Delisle said.
“If that is the framing and the justification for the policy, then it doesn’t make sense to only look at completers,” he said.
Policymakers might consider using an additional metric alongside earnings to hold institutions accountable for low graduation rates, the report suggested, such as a completion rate standard. The bipartisan short-term Pell bill currently includes such a requirement. But Delisle said graduation rates introduce more complexity into a policy and can sometimes be manipulated.
However, there are practical reasons for federal earnings data only including program graduates. Policymakers typically use the data to help understand the earnings value of a given credential, which can’t be ascertained from students who didn’t get one.
Furthermore, researchers said, it can be difficult to include noncompleters in program-level data. It could be hard to determine which program they should fall under, especially if they switched programs before leaving.
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