Offering admission and financing to virtually every student who wants to enroll in college has resulted in a dropout rate of nearly 50% -- and an incredible amount of money down the drain.
My high school was a small charter school that harbored the singular mission of sending all its students off to college. An obsession with college preparation permeated all of our coursework. By senior year, most kids had full-blown college fever.
Sure enough, nearly everyone in our class ended up at one college or another. I remember being slightly puzzled, knowing that some of my friends were unlikely to make it through four years at the schools they’d enrolled in. They were great, smart people, but I knew them well – at that point in their lives, they lacked the focus, drive and maturity they would need to graduate.
Student lenders have absolutely no incentive to encourage responsible borrowing because they will get paid back -- you can file for bankruptcy 400 times, and your student loans will still be there.
Now I'm a sophomore at UMass Amherst, and sure enough, at least a few of these students have already dropped out -- after blowing tens of thousands of dollars on tuition and fees at expensive, but not especially good, private colleges. Some of this money came from their parents, some came from the federal government in the form of the Pell Grants, some came from the colleges themselves, and, especially troubling, some came in the form of student loans that these kids will have to pay down while working low-wage jobs.
This is not a small number of students. Government figures show that of students who entered four-year colleges in 1997, just 54% had earned a degree six years later. A professor wrote about this issue in The Atlantic earlier this year, arguing that it’s immoral to tell all students they can go to college, then crush their dreams by failing half of them. But the problem has deeper effects than hurt feelings: the 54% graduation rate means that around 46% of all money used to finance college tuition results in no degree.
Which means that financially speaking, the spectacularly high dropout rate boils down to a spectacularly bad investment. Though there’s no specific data, one can imagine the countless millions that are wasted financing educations that never come to fruition. We could try to predict which students would be part of the 46% who don’t finish, then encourage those students not to go to college. But to do this would mean a lot of students who might graduate never get to give it a shot. That wouldn’t be fair. So what we can do instead is identify the 5% or 10% of students who are the least likely to graduate, and not send them to college.
The problem is, the current system provides no way, and no incentive, for doing that. In fact, the Free Application For Student Aid (FAFSA) doesn’t take into account an applicant’s academic record at all. The rationale behind this is reasonable and admirable: we don't want federal student aid to be restricted only to the best and the brightest, many of whom come from backgrounds that made it easy for them to excel. But doesn't it make sense, on some level, to withhold aid from the students who have shown during high school that they’re clearly not equipped to make it through four years of college? Doing so would be a big step toward recouping some of that wasted 46% of lost financing.
In theory, this is the job of college admissions officers, who are supposed to act as the gatekeepers. But there are plenty of four-year colleges willing to take the money of anyone who can pony up -- whether that money comes from parents, the government, or that student's paychecks until he’s old enough to buy a discounted movie ticket. These colleges have seats to fill and bills to pay, and sure, they'd all love to be Harvard, but they'll take what they can get. And student lenders? They have absolutely no incentive to encourage responsible borrowing because they will get paid back -- you can file for bankruptcy 400 times, and your student loans will still be there, with interest and penalties accruing daily.
The people financing these college investments -- parents and taxpayers -- have a right to demand that 46% of their money isn't sunk into the education of a student who drops out after a few semesters.
Of course, it gets problematic when you start to talk about real people. Who am I to say that a student shouldn’t be allowed to take a crack at college just because her track record indicates she's unlikely to graduate? Luckily, there's a great compromise: community colleges. Parents, guidance counselors, and the government should be telling students whose academic records indicate an extremely low probability of college success to prove themselves at a local community college for one year. This works similar to the way Major League Baseball teams offer minor league contracts with Spring Training invitations attached, giving players a chance to make the roster without risking millions on a guaranteed contract for someone who might not produce. It's far less expensive, and she'll be able to save on living expenses and work more in the process.
I've written about community colleges in the past and gotten some angry comments from readers concerned that these so-called "pseudo-colleges" will leave their students unprepared for the rigors of a four-year college. But the data doesn't support that, according to The College Board: "Research shows that students who transfer from a community college earn grades equal to, if not better than, students who begin their college careers at a four-year college or university."
Is it the perfect solution? Of course not. But a 46% failure rate sets the bar pretty low for improvement.
Note: This article has been corrected to note that FAFSA stands for Free Application for Student Aid, not Federal Application for Student Aid as originally published.
Zac Bissonnette is an editor with AOL Money & Finance and its new personal finance site WalletPOP.com. He is a sophomore at the University of Massachusetts Amherst.