Economy & Budget

Degrees not debt will grow the economy


Each year, hundreds of thousands of college students drop out of their program and leave school, with significant negative impacts on their future earnings and employment. This college completion crisis has major consequences for our broader economy and workforce — millions of workers are not in the labor force and tens of billions of dollars in wages are lost because of it.

Helping more students graduate on time with a degree or credential is not just an education issue, but also a crucial economic one. By supporting evidence-based programs that have demonstrated success in increasing college retention and completion, we can boost students’ future incomes and create a significant return on investment to our economy and communities.

That’s why both of us worked hard to secure the establishment of the first-of-its-kind College Retention and Completion Grants program in the latest version of the Build Back Better Act that is advancing in Congress.

For some students, getting into college and having the financial resources to afford it is enough. But for many others—particularly first-generation students, those from low-income families, and students of color—more obstacles have to be overcome between orientation day and graduation day. From assistance with transportation and housing to academic mentoring to support with navigating college requirements and coursework, research shows that these students improve their chances of successfully completing college with more personalized, comprehensive support. 

We need to address the college completion crisis in this country. While 84 percent of students graduated from high school as of 2016, a proportion that has steadily risen for the last two decades, only 57 percent of students entering two- and four-year colleges end up graduating.

This data is so troubling because dropping out of college has a major impact on the lifetime earnings and employment of students. Students who never graduate take on massive student loan debts that they can’t repay while seeing little in return for all their effort. Indeed, researchers studied the group of students who entered the Texas higher education system in 2000 and found that those who dropped out saw income gains that were only half as large as those who graduated. Furthermore, students who started college but didn’t earn a degree had a lower labor force participation rate of 63.4 percent, compared to 69.6 percent for associate degree holders and 73.3 percent for bachelor’s degree holders.

Completing college doesn’t just benefit the students themselves, but also their families, their communities, and the economy as a whole. If two- and four-year college completion rates improved from 57 percent to 84 percent, over 100,000 workers would gain employment just for a single class of graduates nationwide.

At a time when workforce shortages are holding our economic recovery back, this increased labor force participation would play a major role in supporting the economic growth of our communities. Similarly, this improvement in college completion rates would boost wages for over 1.2 million students by between $5,000 and $19,000, and would increase local, state, and federal tax revenue by over $90 billion.

Simply put, the return on investment to our economy from helping students graduate is substantial.

These outsized benefits are a key reason why the College Retention and Completion Grants are a core piece of the Build Back Better Act’s proposed investments in higher education. These grants will provide schools with new resources to increase graduation and completion rates for all students enrolled in their public colleges and universities. Colleges will be able to put these funds to work for a variety of evidence-based programs that support student retention, completion, and success.

That includes programs like the Student Experience Project, which is working with partner institutions like the University of New Mexico to create a more inclusive and equitable classroom environment in entry level courses and improve the support services provided to first and second-year students from underrepresented backgrounds. They will also support efforts like New Jersey’s Hunger-Free Campus initiative, which is combating food insecurity on college campuses by setting up food pantries and providing options for students to use their SNAP benefits on campus or find alternative ways to access food.

Colleges will also be able to implement two-generation solutions that help college students with children. The reality is that more than one-in-five college students is also a parent and we have not adapted well to that. If parents are able to find time to attend school, they have to fit their class schedule around their jobs and their child’s school and child care hours. All of this limits parents’ access to a full and rigorous class schedule. The new College Retention and Completion Grants will also allow schools to scale up the direct student supports that students need, such as mental health services, child care, food, transportation, housing assistance, career coaching, and work-based learning opportunities. 

Through the Build Back Better Act, we have an opportunity to bolster our long-term economic recovery from the COVID-19 pandemic and deliver transformational investments for our communities. The College Retention and Completion Grants will play an important role in this effort and will provide returns to our workforce, businesses, and economy as a whole for years to come.

Through this new investment in college completion, we can finally make sure students aren’t just getting into college. We can make sure they are getting through college and into good-paying careers.

Martin Heinrich is the senior senator from New Mexico and is the Vice Chair of the Joint Economic Committee. Mikie Sherrill is represents the 11th District of New Jersey and is a member of the Education and Labor’s Subcommittee on Higher Education and Workforce Investment.

Tags College College debt Martin Heinrich Mikie Sherrill

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