The high cost of low graduation rates

Low community college graduation rates cost students and taxpayers billions of dollars, according to a new report from the American Enterprise Institute.

The report calculated that cutting the dropout rate in half would generate $30 billion in lifetime income for 160,000 additional graduates and $5.3 billion in taxpayer revenue, the report estimates.

Although unprecedented numbers of students are entering college, few stay long enough to earn a degree. For example, in California, 70 percent of community college students drop out before completing their majors.

So, are there ways to stem the tide of community college dropouts and reduce the cost of education for students, families and taxpayers? Researchers at the American Enterprise Institute suggest potential solutions. From the report:

"Community colleges can boost graduation rates and save money by streamlining the degree path, using online courses and borrowing innovations from for-profit schools. Another potential game-changer is the competency-based model, which has helped Florida’s Valencia College achieve a 40 percent graduation rate."

In the new book "Saving Higher Education" by Martin J. Bradley, Robert H. Seidman and Steven R. Painchaud, the authors argue that awarding credits for competency would reduce the cost of higher education by 25 percent and increase graduation rates dramatically. The authors cite Southern New Hampshire University’s highly successful competency-based three-year bachelor's degree program — the longest running in the country — as an example of a highly functional program.

Not everyone is pleased with the American Enterprise Institute's report. The American Association of Community Colleges shot back, arguing that AEI's findings are based on incomplete data. “The so-called analysis is a pseudo-academic attack on community colleges,” the AACC wrote in a statement.