When your clients attempt to pinpoint what their college costs will be they often underestimate the price tag.
Because they assume that their children will graduate from college in four years. Earning a bachelor's degree in the traditional eight semesters, however, rarely happens today.
In fact, graduating in six years is a stretch for many students. Only 57 percent of freshmen who enroll in four-year colleges or universities end up graduating in six years or less, according to the American Enterprise Institute.
I'm sure that your clients would be quite distressed if it took their children six years to earn a diploma. Obviously parents don't want to absorb an additional one or two years of college expenses. Of course, you also have to factor in the lost opportunity cost. If a child is spending too much time on a baccalaureate degree, he or she is delaying the start of a career. Needless to say, young adults on the six-year plan are probably still getting handouts from mom and dad.
While mediocre graduations rates are a national scandal, colleges rarely talk about their four-year track records. Equally aggravating is this reality: the U.S. Department of Education only publishes six-year rates. Your clients also won't find four-year grad rates in those big thick collegiate guide books from the Princeton Review, Fiske and elsewhere.
In a moment, I'm going to share an excellent online tool that can help you or your clients pinpoint four-year grad rates at any college or university. But first, I want to provide some background on why grad rates are often dismal.
Institutions that accept a higher percentage of low-income students tend to produce lower grad rates. Too often, these students show up on campuses without the rigorous educational background that students at stellar high schools in affluent suburbs enjoy. On the flip side, highly elite private universities and colleges, which educate many rich students, enjoy the highest graduation rates.
Another significant issue is declining state support of public universities and, in particular, the regional institutions. While more students have enrolled in state schools over the years, the budgets have never kept pace. That has led to fewer courses, bigger classes and dwindling support services. If you can't get your classes, you can't graduate.
The regional state schools have been much harder hit than the state flagship universities and their grad rates illustrate this. For instance, UCLA's four-year grad rate is 64.9 percent versus for 9.9 percent for San Francisco State and 5.3 percent for San Jose State.
Yet even the four-year grad rates at many flagship institutions are underwhelming. Here are some examples: University of Colorado (41.2 percent) and University of Arizona (32.2 percent), Ohio State (42.3 percent), University of Wisconsin (49.7 percent), University of Oregon (41.4 percent), University of Texas (48.1 percent) and University of Tennessee (30.0 percent).
What your clients might find most interesting is the big discrepancies in grad rates among similar schools. Nobody is going to be surprised that Princeton University enjoys a four-year graduation rate of 90.1 percent compared with 7.9 percent for Kennesaw State University, which is a noncompetitive state school.
You'd assume, however, that schools which draw similar types of students would have similar graduation rates, but that's not always true. Among highly competitive schools, for instance, Providence College in Rhode Island has a four-year grad rate of 83.7 percent versus 46.5 percent for Bennington College in Vermont.
The wide gulf in graduation rates among higher-ed peers is the subject of a study by the American Enterprise Institute entitled, Diplomas and Dropouts, Which Colleges Actually Graduate Their Students (and Which Don’t). Here’s an observation from the authors of the AEI study:
When two colleges that enroll similar students have a graduation rate gap of twenty or thirty percentage points or more, it is fair to ask why. More important, students’ parents, guidance counselors and taxpayers (who foot the bill for many student costs) all deserve to know which schools graduate most of their students and which graduate only a few.)
So what's that handy resource to find four, five and six-year grad rates? Head over to College Results Online (www.collegeresults.org), which is a service of The Education Trust, a nonprofit.
At College Results Online, you can plug in the name of any school and obtain its four, five and six-year grad rates. Equally handy, you can instruct the software to compare the stats of many schools simultaneously.
What's also invaluable is being able to obtain a list of any school's peer institutions. You can do this by clicking on the tab that says "similar colleges" and you will get a chart of the grad rates and other statistics of peer institutions.
As an example, I selected Vanderbilt University and clicked the "similar colleges" tab. I instantly got a list that included such schools as University of Chicago, Washington University in St. Louis, Rice University, Northwestern University, Dartmouth College, Johns Hopkins University and others.
So what's the bottom line? Before a teenager falls in love with any colleges be sure to check their graduation rates. It could save your clients tens of thousands of dollars.
Lynn O'Shaughnessy is a college consultant, author and speaker and she writes three college blogs for CBSMoneyWatch, US News & World Report and TheCollegeSolutionBlog.com.