The Coming College Decline

Barring a policy change, the percentage of Americans with four-year degrees is about to drop. That's bad for everyone.

The best way to understand the stakes in President Obama's proposal to massively expand access to community college is to consider a stark forecast from prominent demographer William Frey.

Frey has calculated that if the U.S. does not improve its college completion rates for young people, the share of Americans holding at least a four-year degree will start to decline as soon as 2020. After that, his model forecasts that the share of college-educated Americans will not climb back to its level in 2015 (just under one-third) at least through 2050.

That's an almost unprecedented prospect for the American economy: The percentage of Americans holding at least a four-year degree has increased steadily since at least 1940, according to the Census Bureau. It's also an ominous prospect in an international economic competition increasingly centered on knowledge and innovation.

The reason the U.S. faces the risk of declining educational achievement is its failure to sufficiently respond to the profound demographic change reshaping society. The current school year marks the first time in American history when a majority of all K-12 public school students nationwide are minorities. Minority students already comprise nearly two-fifths of high-school graduates and will reach about half by 2023, the Education Department projects.

This cresting wave of diversity is reaching onto college campuses. The minority share of the entering class at two- and four-year colleges has increased from about one-fourth in 1995 to nearly two-fifths now. But completion rates for African-American and Hispanic students who start college remain considerably lower than for whites (or Asian-Americans). Because those black and Hispanic students make up an increasing share of the college pipeline, it is their high attrition rate that creates the risk that the nation's overall share of college graduates will shift into reverse.

That will quickly affect employers, because the Census Bureau has projected that through 2030 the number of working-age whites will fall by 15 million. All of the growth in the workforce through then will come from Hispanics, Asian Americans, and African-Americans (in that order). Frey projects that by 2030 minorities will become a majority of all young (18-29) adults. "The fact that the labor force will continue to 'brown' from the younger ages on upwards means that a great deal of attention must be paid to increasing minority postsecondary education so that the skill levels of our entire workforce stays competitive," says Frey, a senior fellow at the Brookings Institution and author of the insightful recent book Diversity Explosion.

That's where the sweeping plan Obama announced last week fits in. Obama proposed to spend $60 billion over 10 years to ensure that all students can complete community college at no cost. Students would need to maintain a grade-point average of at least 2.5 and complete their degree in three years or less. Community colleges would need to demonstrate that their courses either facilitate transfer to four-year institutions or instill occupational skills that lead to postcollege employment. States would need to contribute one-fourth of the cost. But, fully implemented, the plan could both broaden access for students and propel overdue institutional improvement at community colleges across the country. "This is about reform in community colleges as well as increasing access," says Cecilia Munoz, Obama's chief domestic policy adviser.

Progress on both fronts is critical for the rapidly diversifying future workforce, because community colleges are the largest portal through which the growing ranks of Hispanic and African-American students access higher education. Path-breaking research by the Georgetown University Center on Education and the Workforce has found that fully half of the increased enrollment among black and Hispanic students since 1995 has been channeled into community colleges. That means the U.S. is unlikely to increase the number of minorities with four-year degrees without first improving community colleges. "Building a policy proposal around that institution almost by definition creates a portfolio for upward mobility," says Anthony Carnevale, the center's director.

The problem is that community colleges are asked to prepare the students who emerge from high school needing the most help while operating with vastly fewer resources than more selective four-year schools (which have absorbed most of the increasing white enrollment). Not surprisingly, that equation produces much weaker outcomes in completion and employment. Of students who entered a community college in 2004, only about one-third had acquired any degree six years later, far fewer than students who started at four-year schools.

Obama's plan represents the beginning of a long conversation, as it's unlikely to pass a Republican Congress. And it would work only if it genuinely demands improvement from community colleges, which admittedly face great challenges, but too often perform inadequately. But the president's proposal stands as a thoughtful bookend to his call for a federal-state partnership to provide universal access to preschool. Each frames the question that demographic change is making unavoidable: Will the U.S. make the investments necessary to equip our increasingly diverse workforce to succeed? The answer, as Munoz says, doesn't "just affect the communities involved; it absolutely affects our entire economy."