Over the past few generations, higher education has been transformed from a luxury only available to a privileged few into an institution that a majority of Americans attend as a basic precondition for economy security. In 1971, 34% of young adults had ever attended college and fewer than one in five had attained a bachelor’s degree. By 2012, 63% had attended college and 33% had earned a four-year degree. In the face of expanding access to higher education, concerns remain over educational quality, student debt and the economic returns that students can expect from their education.
Americans who do not attend college face increasing economic difficulty. Wages for young adults without four-year degrees have decreased steadily since the 1970s, and the earning gap between high school and college graduates has increased over the same period. Research has consistently found that going to college increases earnings, with those majoring in the sciences out-earning students majoring in humanities. It is difficult to quantify precisely the economic benefits of college attendance, however. One could argue that college graduates — because they may have wealthier upbringings, stronger cognitive skills or more social ties — would have earned more money even if they had never attended college in the first place. Even after a 2014 study took such factors into account, it still found that people with a bachelor’s degree in the humanities had a $700,000 average increase in lifetime earnings, compared to high school graduates; and those with bachelor’s degrees in the sciences gained a $1.5 million increase in lifetime earnings.
As the total amount of outstanding federal student debt surpassed $1 trillion in 2013 — and rates of default rose — some media commentators and politicians began using the phrase “student debt crisis.” It is clear that many people struggle to pay large debts on inadequate salaries — a problem that disproportionately affects African-American college graduates. Yet research has shown that, on average, growing student debt is offset by the higher wages that result from education. A 2014 report by the Brookings Institution shows that wage increases offset these debts and that a larger number of people attending graduate school account for a considerable portion of the aggregate debt increase.
Another issue in higher education that has garnered the attention of policymakers and admissions officers is a phenomenon referred to as “undermatching,” whereby high achieving students from low-income or underrepresented minority backgrounds fail to apply to selective colleges. One study found that a majority of high achieving, low-income students do not apply to any colleges that are good academic fits for them. A related issue that has not received as much attention involves how to match students who have lower levels of achievement with the colleges in which these students will find the most success. Will a student who just barely meets the minimum requirements of a selective college do better there or at a less selective institution?
A 2014 study by Joshua Goodman of the Harvard Kennedy School and Michael Hurwitz and Jonathan Smith of the College Board, “Initial College Choice and Degree Completion: Exploiting Variation in College Access Generated by Admissions Test Score Thresholds,” sought to address this question by looking at college applicants who scored either just below a school’s minimum SAT score threshold, or barely over the threshold. The authors looked at the relationship among SAT scores, college selection and graduation rates for students who either sent their SAT scores to one of seven East Coast public universities or who took the SAT while residing in the state of Georgia. The study used SAT score data from the College Board and enrollment, transfer and degree completion data from the National Student Clearinghouse. The researchers included data on students who graduated high school between 2004 and 2007. While Georgia makes its SAT score cutoffs known to the public, the other seven universities have hidden thresholds that the authors were able to determine through statistical analysis.
The study’s findings include:
- Among high school students who sent their SAT scores to a low-SAT threshold university (defined as those requiring a minimum composite SAT score of 754 to 1028), half of those students who scored below the cutoff ended up enrolling in another four-year college or university. Most of the remaining half enrolled in a two-year institution, while a small number did not enroll in any school within a year of high school graduation.
- Low-income students who just made the SAT score cutoff and were then able to enroll in the university of their choice were much more likely to graduate than those who barely missed the cutoff. Among low-income students who sent their SAT scores to a low-SAT threshold university, enrolling in their target college increased the six-year bachelor’s degree completion rate by 49% points when compared to students who were unable to enroll because they scored just below the threshold. There was no statistically significant change in completion rate for high-income students.
- For high-threshold universities (defined as a minimum composite score of 1192 to 1216), students who made the cutoff had no advantage in six-year bachelor’s completion rates. Students who missed the threshold and enrolled in other universities were just as likely to complete their degree.
- For students who took the SAT in Georgia, those who scored just above the state university system’s SAT score cutoff and subsequently enrolled in a Georgia state university were nearly twice as likely to earn a bachelor’s degree compared to students who scored just below the threshold and had to seek enrollment at other colleges.
“The marginal students we study are, by definition, among the lowest-skilled at their target colleges and thus not obviously well-matched to those institutions,” the authors state. “Nonetheless, we show that a subset of such students, and particularly low income ones, benefit from attending higher quality colleges even though they may be more poorly matched to those institutions in terms of academic skill.” Further, they write, “students should make test-taking and application choices that prevent test score thresholds, some of which they may not even be aware of, from restricting their available postsecondary options. In settings where such thresholds are publicly known, this implies that students falling below those thresholds might be encouraged to retake the relevant exam, either through information campaigns or reductions in the costs of retaking.”
Related research: For data relating to the association between racial groups and SAT scores, see the U.S. Department of Education’s historical chart. A 2011 Princeton University study looks at the economic returns of attending a highly selective college.
Keywords: higher education, youth
RWP14-030.