![]() ![]() However, the inclusion of the default rate data yields a much truer, albeit alarming picture, particularly for Black graduates. If we use only the traditional measure - i.e., college graduation rates - the Black-White and Latino-White completion gaps look identical (18.1%) for our cohorts of students and institutions. Moreover, the college success rate gap between White and Black students would be nearly 30 percentage points, and roughly 21 percentage points for Latino students. But Black students would see the most significant drop: Their college success rate would decrease from 51.5% to 37.1%, a 14.4 percentage point difference. The rate for Latino students would decline from 51.5% to 44.7%, a difference of 6.8 percentage points. ![]() The success rates for Latino and Black students would change, too. By our reckoning, which includes both graduation and default rates, the college success rate for White students would decrease from 69.6% to 65.9%. The table features both graduation and default rates, along with the new college success rates on the far right. The results of our calculations are listed in Table 1. The equation looks like this: College Success Rate = Graduation Rate X (100% – Default Rate) To calculate this measure, we multiplied a student’s chances of graduating by the likelihood that said student would not default on his or her loans (i.e., 100% minus the default rate). However, we focused on six-year graduation rates and 12-year default rates, since this data is currently collected - but more on that later. One could create a similar measure by combining another college completion metric, like the Association of Public Land-Grant Universities’ Student Achievement Measure, with another post-collegiate outcome, like loan repayment rates. 2 Also, let’s not forget that racial discrimination in the labor market is another key factor that must be considered.Ī different way to examine college student successĬombining default rates with six-year graduation rates would provide a more comprehensive view of college student success. 1 The differences in default rates were more likely caused by racial differences in (1) employment opportunities tied to students’ majors, (2) institutional reputation (selectivity), and (3) the financial assistance students receive from family to pay back loans. These vast racial and ethnic disparities are almost certainly not the result of wide variations in academic performance, since the GPAs of these graduates were relatively similar across racial groups. About 3 in 10 (one-third) Black graduates from four-year public or private, nonprofit institutions defaulted on their student loan, while nearly 14% of Latino graduates did so. The gap in default rates between Black and White students was nearly 23 percentage points. The default rates are almost six times higher among Black graduates and 2.5 times higher among Latino graduates than they are among White graduates. As you can see in Figure 2, the default rates for the same students who completed a bachelor’s at a four-year public or private, nonprofit institution vary considerably by race and ethnicity. Given the dire consequences of defaulting on federal loans, a failure to make payments is a good indicator of financial distress. Twelve-year federal loan default rates are useful because they tell us the extent to which graduates are financially capable of making minimum payments on their federal student loans. How many students would bother to take out loans and enroll in college and earn a degree (or credential) knowing that their work would not lead to employment that would enable them to repay their loans?ĭefault rates suggest there is more to the story While alarming, this discrepancy doesn’t fully capture the extent of the problem, because post-college success isn’t included. That’s a graduation rate gap of roughly 18 percentage points. This data * shows that slightly more than half of Black and Latino (51.5%) students earned a degree after six years, compared with nearly 70% of White students. So, let’s look at graduation rates for students who (1) started at a public or private, nonprofit four-year institution, (2) initially enrolled as full time seeking to earn a bachelor’s degree, and (3) received federal loans (see Figure 1). Hate it or love it, the federal government’s six-year graduation rate for new students who enroll full time has long been the traditional way of defining student success. Graduation rates highlight large racial gaps in college completion ![]()
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