Postsecondary Finance and the Attainment of Community College Students

1. Postsecondary Finance and the Attainment of Community College Students James Benson UW-Madison Department of Sociology/ Interdisciplinary Training Program in the Education Sciences

2. Why Research State Policies and Community College Students? • Relatively little is known about the conditions and policies which promote success for community college students. Pascarella and Terenzini (1998) estimated that of the of the 2,600 studies they collected for their meta-review entitled How College Affects Students, less than 5 percent of the studies pertained directly to community college students. • Disproportionately, community colleges are the point of entry to postsecondary education for first-generation, minority, and low-income students. • Rates of success for community college students are low: Depending on the sample, 15-25 percent of CC entrants complete an Associate degree, and 20-25 percent will ever transfer to a 4-year institution. These low rates of success have large implications for educational equality, and the percentage of citizens with college degrees.

3. Extant Findings on Finance and Community College Students • Expenditures: Some recent evidence (Gross and Goldhaber, 2009) that increased expenditures on student support services may promote transfer; percent full-time faculty may be more important than instructional expenditures. • Tuition: Tuition pricing is negatively related to within-year persistence; CC students may be more price-sensitive than 4-year students (St. John, 1994) • Financial Aid: Community college students are much less likely to access FA; mixed evidence on benefits of aid for CC students.

4. 3 Pillars of Postsecondary Finance • I. Direct government appropriations: • State appropriations; • Local and Federal government appropriations. • II. Tuition revenues; • III. Financial Aid. • Additional Props: 4-year institutions increasingly rely on revenue from gifts, endowments, and additional operations.

5. Research Questions • When considered together, which of the ‘three pillars’ is most consistently associated with credit and degree attainment for community college students? • When disaggregating expenditures, are instruction and student support more strongly associated with attainment than other outlays? • When disaggregating revenues, are state appropriations more instrumental (for attainment) than other forms of support?

6. Student Data • Two most recent* cohorts from NCES’ s National Education Longitudinal Studies program: • HS&B (Sophomore Cohort) followed from tenth grade (1980) through the Postsecondary Education Transcript Study (PETS: 1993); • NELS:88 panel of tenth graders (1990) who were followed through PETS:2000. • Advantages of HSB-So and NELS:88: • HS achievement data; detailed SES measures; and transcript-indicated PSE careers and outcome data. *ELS:2002 most recent, but PETS not available.

7. Finance Data • Tuition Pricing, Expenditures and Revenues: • Higher Education General Information Survey, Basic Student Charges (HEGIS XVII, 1982-83), and Institutional Characteristics component, (HEGIS 1983-84). • Integrated Postsecondary Education Data System (IPEDS) Finance and Institutional Characteristics components for 1992-93. • Financial Aid: National Association of State Student Grant and Aid Programs (NASSGAP): 15th and 25th Annual Surveys (final figures for 1982-83 and 1992-93); State enrollment sums from Digest of Education Statistics.

8. Changes in Postsecondary Financing 1983-1993 • Tuition was the largest growth category (77%: 2-year; 67%: 4-year); • Total government appropriations grew modestly (10%: 2-year; 9%: 4-year); • Financial aid grew the least (0-5 percent).

9. Expenditures • Total expenditures grew moderately: 17%: 2-year; 26%: 4-year; • 4-year almost 3 times as large as 2-year. • Instructional expenditures grew modestly: 9%: 2-year; 17%: 4-year; • Student support services grew moderately, albeit from a rather small base at 2-years 21%: 2-year; 26%: 4-year; • Administrative expenses were static at 2-years, but not at 4-years; • 4-years increased research expenditures.

10. Revenues • Total revenues grew moderately for 2-years (15 percent) and substantially for 4-years (28 percent), with the 4-year revenues exceeding 3 times 2-year revenues. • Revenues from state sources were stagnant. • Tuition revenues were the largest growth area (42%: 2-year; 60%: 4-year) • 4-years substantially increased their reliance on gifts and endowments, and revenues from additional operations. These categories were much smaller for 2-years.

11. Research Method • Pooled (2-cohort) OLS and Probit regressions of attainment outcomes (credits and degrees) including policy measures and a host of control measures for student and family attributes. • Two-step estimation of policy effects using ordered probit model of postsecondary entrance sector; combined with attainment outcome models (above).

12. Findings • ‘Three Pillars’ Model: Government appropriations consistently positively associated with credit and degree attainment (Effect size: 2 credits; delta p=0.03). Need-based aid associated with degree attainment (delta p=0.02). • Expenditures Model: Instruction and student support not significantly related to attainment. Research and public service negatively associated with attainment (-2 credits; delta p=-0.04); Administration positively associated with degree attainment (delta p=0.05). • Revenues: State appropriations consistently positively associated with attainments (2 credits; delta p=0.02); tuition associated with degrees (delta p =0.03).

13. Conclusions • State support, in the form of direct appropriations, is most consistently (positively) related to attainment; need-based financial aid is positively related to degree completion. • Tuition pricing does not appear to depress attainment for CC students, and tuition revenues may help with degree attainment. • Instructional and student support expenditures are not (at least in this study) more important than other expenditures for attainment.