While higher education faces many challenges, if it remains focused on its core mission of educating learners and expands its practices, it can serve even more students.
New research from McKinsey & Company indicates that with bold, decisive action, U.S. higher education can expand its impact, deliver on its promise of more equitable outcomes, and improve the nation’s economic competitiveness. Their analysis suggests that higher ed should aspire to graduate ten million more students than currently projected over the next 20 years. While the goal is ambitious, McKinsey researchers believe there is a path to achieving it in a way that successfully addresses the sector’s challenges.
The benefits of a college degree are clear but not distributed evenly throughout society. Only 21 percent of Hispanics and 28 percent of Black Americans have a bachelor’s degree or higher compared to 42 percent of non-Hispanic Whites and 61 percent of Asian Americans. Schools that serve underrepresented and low-income students fail to graduate significant percentages of the student body every year—creating student debt with no diploma to show for it.
As student loan debt has increased, so has the reconsideration of the value of postsecondary education. In May 2021, 65 percent of college students surveyed agreed that higher education is no longer worth the cost.
Improving the Value Proposition of Higher Education
How can institutions extend the benefits of higher education to more Americans while creating more equitable economic mobility and a stronger economy? It is especially important that schools demonstrate their ability to graduate the most vulnerable students. Currently, there is a 45 percent point gap in completion rates between top- and bottom-quartiles in both two- and four-year institutions.
Completion rates vary widely by institution for both bachelor’s and associate degrees. Also, there are large differences between high- and low-performing schools when controlling for the type of institution and the share of Pell Grant-eligible students. How a school engages and supports its students has a big influence on how many students graduate. With intention, 141 bachelor’s granting schools with at least 4,000 students have improved completion rates by at least ten percentage points in the past decade.
The total cost of producing ten million additional graduates over 20 years would be approximately $1.2 trillion. These costs could be reduced if higher education institutions increased affordability and decreased barriers to education, for example through online and hybrid programs and tuition installment programs. Costs can also be mitigated through academic offerings that lead to higher completion rates and higher-paying jobs.
How to Improve Access and Completion Rates
McKinsey analysts found four broad barriers facing learners and ways to mitigate them:
- Affordability and financial resources. Make college more affordable with financial aid and low-cost wraparound services like childcare to make pursuing and completing a degree more possible.
- Access to information. Provide better access to information on how to enroll, how to apply for financial aid, and present possible outcomes of the various programs.
- Mindset and preparation: Help students feel they’re up to the tasks through pre-enrollment and extracurricular experiences.
- Support services and networks. Ensure that students have the support they need from mentors to career and professional guidance.
McKinsey suggests that higher ed funders and institutions take the following decisive actions:
- Prioritize the 52.5 million potential adult learners without college degrees through creative support structures, more-flexible class schedules, and tailored instructional modalities.
- Fill excess capacity in US universities beginning with top performing institutions with high completion rates.
- Close the 45-percentage point gap in completion rate with student-specific, data-driven interventions that support students from enrollment to employment.
- Guide students toward the 64 percent of postsecondary programs that offer a positive ROI with ten years.
- Improve college affordability through cost efficiency and new financing mechanisms.
The U.S. needs more graduates to fill skilled jobs; drive greater economic growth, mobility, and competitiveness; increase civic engagement; and improve health outcomes and national security. Graduating ten million more graduates in 20 years may determine the future economic health of our country.