Graduation rates play a large role in the measurement of student outcomes in higher education. But how are graduation rates measured and reported in the United States?
At first glance, graduation rates seem like they should simply measure the percentage of all university or college students who get a degree. Yet the calculation of many widely available graduation rates is much more complicated.
Integrated Postsecondary Education Data System (IPEDS) is the official higher education data reporting system for the Department of Education. IPEDS is used for all higher education institutions in the United States, including four-year institutions (both public and private) as well as community colleges and credential issuing institutions, such as private cosmetology schools. Its measures of graduation rates and other institutional metrics are the primary statistics reported to the public.
How does IPEDS measure graduation rates? The complex process begins by constructing a cohort of students enrolled in an institution. This cohort serves as the denominator for calculating the graduation rate and includes all first-time, full-time, degree-seeking students who are enrolled within a certain time frame.
To construct the graduation rate, the measure looks at how many students — from the cohort — graduated within 150 percent of the expected time to complete their degree. If the student is working toward a bachelor's degree, this would be six years; if the student is seeking an associate degree, it would be three years. For a one-year certificate, the time frame would be 18 months.
Including only first-time, full-time students in the cohort works relatively well for four-year institutions, especially those with many full-time students, but it doesn't work as well for community colleges. The cohort definition significantly undercounts the number of students served by these institutions.
Many community college students are not first-time students: The average age of community college students is older, and many have attended college in the past. Even for younger students, community colleges often serve as landing spots for those who did not have successful outcomes attending four-year institutions.
Also, many community college students do not attend full time. According to IPEDS, just 28.2 percent of community college students attended full time (defined as attempting at least 12 credit hours a semester) in 2021. Four-year college students are much more likely to attend full time: 64 percent of public four-year and 75 percent of nonprofit, private four-year undergraduate students attended full time in 2021. So, while some students at all types of colleges and universities are left out of the graduation rate, the percentage of students left out at community colleges is much higher.
While graduation is clearly the goal for many who enter the halls of higher education, it may not be for all students. Some simply seek credentials to improve their workforce outcomes, while some use these credentials toward a degree. For example, an associate degree in Industrial Electronics Technology might include an embedded ETA Electronics Technician certificate. Some students might exit the degree program as soon as they have received this certification, as it provides them with upward career mobility. Others may remain in the program but finish their degree after the end of the 150 percent time to completion window. Focusing solely on graduation rates means that these students are considered having "failed." But, through the lens of the Federal Reserve's maximum employment mandate, shouldn't these situations be counted as successes?
The Richmond Fed's Fifth District Survey of Community College Outcomes is working to change the way community college success is measured with three major extensions to the traditional IPEDS graduation rate. First, we are expanding the cohort to include part-time and non-first-time students at the institution. Second, we are broadening the focus from graduation rates to the attainment of any degree, certificate, or industry-recognized credential. And finally, we are using a four-year time window rather than focusing on 150 percent time to completion. We are eager to see how this measure of community college outcomes in the Fifth District stacks up to current publicly available metrics like the IPEDS graduation rate. Look for a follow-up post showing how IPEDS data stacks up for community colleges in the Fifth District, and learn more about our work on community colleges here.
Views expressed are those of the author(s) and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.
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