International Higher Education, Fall 2002

Crucial Choices: Student Behavior and Persistence in the United States

Jacqueline E. King
Jacqueline E. King is director of the Center for Policy Analysis, American Council on Education, 1 Dupont Circle, Washington, D.C. 20036, USA. E-mail: <jacqueline_king@ace.nche.edu>.

Everyday, students make decisions that affect their ability to complete a degree. Some of these choices they weigh carefully, such as which college to attend. Yet they underestimate the impact of many other choices, such as whether to drop a course or work more hours at their jobs, on the likelihood of completing their degrees.

Given that more than half of all U.S. undergraduates attend college part time and 80 percent work while enrolled, it is crucial that American institutions understand and confront the effects of student choices on academic success. Colleges and universities in the United States will increasingly be challenged by stakeholders such as board members, parents, and state and federal policymakers to maintain and enhance graduation rates and, in many cases, to shorten time-to-degree. As the student population becomes more diverse in terms of age, race or ethnicity, and socioeconomic status, improving graduation rates will become more difficult. Understanding the critical links between students’ financial decisions and academic success—especially for low-income students—will help campuses refine their efforts to help all students succeed.

Student Financing Choices
Financing choices can have a substantial impact on students’ academic success. According to a national longitudinal study of beginning postsecondary students, conducted by the U.S. Department of Education, 32 percent of 1995–1996 entering freshmen had dropped out with no degree by spring 1998. In general, students who were least likely to drop out pursued a very traditional pattern: they began at four-year institutions, studied full time, lived on campus, and worked part time (a maximum of 14 hours per week).

This basic pattern varied somewhat by student income. Middle- and upper-income students were less likely to have dropped out than low-income students. For both groups of students, however, starting at a four-year institution, attending full time, and living on campus were associated with better-than-average persistence. Taking on student loans and working part time to finance these choices produced the lowest dropout rate.

The importance of combining student loans with part-time work may be explained by the way work and borrowing correlate with attendance status and institution type. For example, 82 percent of low-income students who borrowed and worked part time were in attendance on a full-time, full-year basis. In contrast, only 27 percent of students who did not borrow and who worked 15 hours or more per week attended school full time and year-round. Students who combine borrowing with part-time work can best afford—both financially and in terms of time—to be full-time, full-year students. Student loans and working part time also are highly correlated with attendance at a four-year institution—another predictor of persistence. Three out of four students with student loans who worked part time attended a four-year institution, compared with just 18 percent of those who did not borrow and worked 15 hours or more per week.

While this strategy is clearly associated with success, less than 6 percent of first-year students adopted it. In fact, 44 percent of entering students chose the financing strategy that is least associated with success: borrowing nothing and working 15 or more hours per week. This pattern varies little with student income. Even those students who could best afford to borrow and work part time chose instead to avoid student loans and work 15 or more hours per week.

Why are American students making counterproductive choices? One explanation may be that they assume it will be less expensive in the long run to attend college part time and avoid student loan debt. For most students, this is not the case. Of course, for those who drop out because they cannot adequately juggle college and work, the cost of working too many hours while enrolled is enormous. These individuals will pay for the rest of their lives in lost earning power. However, even those students who simply extend their undergraduate careers will incur opportunity costs because they are delaying their entry into the job market as full-time, college-educated workers.

Student choices also have important consequences for institutions. Every institution in the United States wants—and is expected by key stakeholders—to maximize its graduation rate. If a large proportion of the student body is working and attending part time, achieving this goal is likely to prove very difficult. In many states, colleges and universities also are experiencing significant growth in enrollment. One of the most efficient, cost-effective ways to accommodate growth is to lower time-to-degree. If students move through their academic programs efficiently, they will graduate and make room for new students. When students carry less than a full-time load, they extend their time-to-degree, placing additional strain on campus resources. Helping students make wise financial decisions will pay dividends not only for individual students, but for institutions as well.

Implications for Policy and Practice
An important option that campuses can pursue to help students make wise choices is to forge stronger links between academic and financial advising. Can an academic adviser refer a student directly to a financial counselor? Could an academic adviser help a student determine if dropping a course is in their financial—as well as academic—best interest? Is the importance of making the right choices about work, attendance, housing, and borrowing emphasized in student and parent orientation programs, academic advising sessions, and other such opportunities? Do faculty understand how many hours students spend working and the effects of that work on their academic performance? Answering these questions may help institutions create a more seamless web of advising services.

There is no "right" financing strategy that will suit all students, but every student can be helped by having a clearer understanding of the costs, benefits, and potential pitfalls associated with their various options. Such a shift in thinking will help individual students reach their academic goals and may free up vital space and resources at institutions that must accommodate a large influx of new students. While this report examines only U.S. higher education, it seems likely that such strategies would help institutions in the many countries that are experiencing unprecedented enrollment growth.

Author’s note: This article is adapted from Crucial Choices: How Students’ Financial Decisions Affect Their Academic Success, published by the American Council on Education in June 2002 and available on-line at <http://www.acenet.edu/bookstore>.