As we enter graduation season, the media will get flooded with stories of labor market prospects of young people, college graduates, and of course, student debt. EPI will do its fair share of flooding (with a 2014 update to our Class of 2013 paper), but one aspect that often gets overlooked are those who have started college but will never graduate. Young adults with some college but no degree are stuck in a catch-22, without the better employment opportunities and wage increases that comes with a college degree, but with a similar mountain of student debt. The number of people that fail to complete college—and the burdens this places on them—is one of the most corrosive aspects of the higher education system.
The Bureau of Labor Statistics recently released new data from their National Longitudinal Survey of Youth, a survey that follows women and men born between 1980 and 1984 in an effort to provide long-term information on the employment experiences and educational attainment of young people. The educational makeup of young adults by the time they are 27 is such: 28.1 percent have a college degree, 25.5 percent have a high school degree or equivalent with no further education, and 8.7 percent have not finished high school. That leaves nearly 40 percent of young adults who have some college education by age 27 (this includes individuals with an associate’s degree or any enrollment in college after high school). Put another way, of the 66 percent of young adults who began college, 37.5 haven’t completed their degree by age 27.
While it’s encouraging to see that more young adults are getting their foot in the door at colleges, you need to graduate to reap the higher wages of a college degree. This is seen most obviously in the entry-level wages young adults. Currently, entry-level college graduates (age 23-29) make $20 an hour, while young adults with some college (ages 21-27) make $12 an hour. An hourly wage of $12 is much closer to high school graduates’ wages of $10 an hour than to the wages of their college graduated peers.
College completion varies among women and men, and the disparities further grow by race. Women are much more likely to finish college than men: 46 percent of all women who began a bachelor’s completed it by age 27, compared to 39 percent of men. Meanwhile, the breakdowns by race are stark: not only are white students more likely to begin college, but they are twice as likely to finish. 68 percent of white young adults age 27 start college, compared to 56.5 percent of black young adults and 57.5 percent of Hispanic young adults. Of the 68 percent of white young adults who begin college, around half had a bachelor’s degree by age 27 (32.7 percent of all white young adults). However, for the 56.5 percent of black young adults who started college, only 27.1 percent had a bachelor’s degree by age 27 (15 percent of all black young adults), and for the 57.5 percent of Hispanic young adults that start college, only 25.2 percent had a bachelor’s degree by age 27 (14.5 percent of all young Hispanic adults).
So what’s stopping young adults from getting in the driver’s seat and finishing? Often, the desire to graduate from college is outweighed by the financial hardship college places on students and their families. A study by Laura Hamilton found evidence that students whose parents can afford to pay for their schooling are much more likely to graduate than students whose family can’t support them in college (although said students are less likely to get good grades, interestingly enough). This leaves few options for students from low income families. According to a study by the Advisory Committee on Student Financial Assistance of 2004 high school graduates, 31 percent of low-income college students earned bachelor’s degrees compared to 46 percent of their moderate-income counterparts. Additionally, the study showed that between 1992-2004, students who come from low-income families are less likely to complete a bachelor’s degree, and more likely to enroll in 2-year or nontraditional programs. To make attending college a reality, students from low-income families take on additional debt, work and take classes part time, or drop out completely to work and save for schooling. Meanwhile, they are putting off graduation and higher wages for the foreseeable future.