More About the AEI Graduation Rates Report: The Performance of Private vs. Public Institutions

June 12, 2009  

Last week, the American Enterprise Institute released a paper that spotlighted the often large differences in graduation rates between somewhat similar institutions of higher education. As President Obama made clear in his call for postsecondary completion for every American by 2020, the issue of college completion is critical to our nation's future. The AEI paper helps push this conversation forward.

However, one fact not mentioned in its report is the significant difference between the completion rates of students at private, nonprofit colleges and universities, and those at state institutions.  

Consider the following:

• Private, nonprofit colleges and universities offer smaller classes and more personal attention from faculty and administrators.
• As a result, their students graduate in four years, on average, at nearly twice the rate as students at state universities: 79 percent vs. 49 percent, respectively, according to the U.S. Department of Education. This holds true for students regardless of their economic background or level of academic preparation entering college.
• The extra fifth and sixth years of tuition at a typical state university adds up to $6,800. The lost income from delaying entry into the work force for those two years adds up to, on average, $60,000. Going to a private college, receiving institutional grants and scholarships, and having a greater chance of graduating in four years, can end up the more affordable option for many students.

It's reasonable that when considering a college, that students and families look at the graduation rate and ask the institution to explain it. College graduation rates (and lots of other institutional data) are available for free at the Department of Education's College Navigator, NAICU's U-CAN (private colleges and university only), and AASCU/APLU's VSA (state institutions only).

However, graduation rates alone cannot be the only factor students consider. Even just as important when deciding on a college is meeting with administrators and instructors, talking to current and past students, and sitting in on classes. This is the best way for a student to determine which college is the best fit.