Steady progress in increasing college attainment — but much more to do

This is the fourth year that Lumina Foundation has released a report on progress toward the goal that 60 percent of Americans obtain a high-quality postsecondary degree or credential by 2025 — an objective we call Goal 2025. In these now-annual reports, we set the metric for measuring progress as the higher education attainment rate — the percentage of the nation’s adult, working-age population holding a two- or four-year college degree.

This year, we report data for 2011 — the most recent year for which data are available. In 2011, the percentage of Americans between the ages of 25 and 64 with a two- or four-year college degree was 38.7 percent. This is an increase from last year’s report; in 2010, the attainment rate was 38.3 percent. Overall, the U.S. attainment rate has been increasing slowly but steadily; in 2008, it was 37.9 percent, and in 2009 it was 38.1 percent.

This year the first solid estimates of the number of high-value postsecondary certificates have been produced. They suggest that an additional 5 percent of the U.S. adult population between the ages of 25 and 64 hold a postsecondary certificate with significant economic value.

The higher education attainment rate of young adults (ages 25-34) is a good leading indicator of where higher education attainment rates are headed. In 2011, the rate was 40.1 percent — almost one-and-a-half percentage points higher than that among all adults, and two-and-a-half percentage points higher than in 2008.

Lumina’s attainment goal has always included high-value postsecondary certificates, but data on the number of adults holding certificates is not readily available.1 This year, however, the first solid estimates of the number of high-value postsecondary certificates have been produced. They suggest that an additional 5 percent of the U.S. adult population between the ages of 25 and 64 hold a postsecondary certificate with significant economic value.2

The recent increase in attainment rates — especially among young adults — is a step in the right direction, but we must increase attainment much more to reach Goal 2025.

Attainment and the economy

Nationally, the rationale for increasing higher education attainment has become more widely understood, and most now agree that, as a nation, we desperately need more citizens with postsecondary credentials. Much of this awareness is driven by the realization that 65 percent of U.S. jobs — almost two- thirds — will require some form of postsecondary education by 2020.3

For individual Americans, the consequences of not completing postsecondary education are increasingly dire. For many years, the main reason many people went to college was to gain access to better-paying jobs that allowed them to earn more throughout their lives. But earnings potential is no longer the only driver. In this economy, without postsecondary skills, you may not even have a job.

The Great Recession made this relationship painfully clear. Between the beginning of the recession in December 2007 and its official end in January 2010, the economy lost 5.6 million jobs for Americans with a high school education or less. Jobs requiring an associate degree or some college declined by 1.75 million, while the number of jobs for Americans with a bachelor’s degree or above actually grew by 187,000. That’s right — the growth in jobs for bachelor’s degree holders slowed during the recession but never actually declined, and the economy continued to create jobs for them throughout the recession.

Since the end of the recession, jobs requiring an associate degree or some college have grown by 1.6 million and almost recovered to pre-recession levels. Jobs for bachelor’s degree holders actually have accelerated their growth — adding 2 million new jobs during the recovery. In contrast, the recovery never came to those whose highest level of education is a high school diploma or below. Since January 2010, the economy has lost an additional 230,000 jobs for people with no more than a high school education.4

In spite of these numbers, some try to make the case that the value of college degrees is diminishing, citing the unemployment rates of recent college graduates as evidence. But even a cursory look at the actual data shows how spurious these arguments are. As is now well-known, the overall employment rates are much higher for college graduates. And that is certainly true among recent graduates. In 2010, at the peak of U.S. unemployment rates, around 88 percent of 23- and 24-year-old college graduates were employed. No one is saying that the job market for college graduates is easy, but the situation for those with less education is far worse. For high school graduates in the same age group, the rate of employment was only 65 percent; for high school dropouts it was a crushing 42 percent.5

Some suggest that many college graduates are underemployed in jobs that don’t require postsecondary credentials. Again, the facts speak otherwise. The wage premium — the gap between what employers are willing to pay for graduates vs. those who don’t have a postsecondary credential — is actually growing, and has continued to grow throughout the recession and its aftermath. Employers need more college graduates, and they are paying an increasing premium to get them.

Perhaps the clearest evidence of the need to increase higher education attainment comes from the fact that employers cannot find people with the skills they need to fill all of their current job openings, much less those that will be created in the future. In a recent survey, a third of employers cited “lack of technical competencies/hard skills” as their main difficulty in filling jobs — up from just 22 percent in 2011.6 For example, in the manufacturing sector, where advanced manufacturing techniques are dramatically increasing the demand for postsecondary skills, fully two-thirds of manufacturers reported “moderate to severe” shortages of qualified workers in 2011.7 The same issue is a growing problem in the healthcare industry.

What happens when employers can’t find people with the skills and credentials they need? The answer is that the economy as a whole suffers. Available evidence suggests that our nation’s inability to match jobs to people with the right skills is a major factor in explaining why employment rates have not improved as quickly as they should have in the economic recovery.8

Attainment and our society

Increasing the number of college graduates will not only bolster our economy, it will also strengthen our democracy and communities throughout the nation. These social and cultural reasons for increasing educational attainment are, at times, undervalued. There is a wealth of evidence that increased attainment improves health, lowers crime rates, and yields citizens who are both globally aware and participate more in civic and democratic processes such as voting and volunteering. All of these factors have enormous implications for our democracy.9

While the evidence about the social benefits of increasing higher education attainment is as clear as ever, there is a new urgency about it in today’s environment. Many factors are contributing to the need to increase attainment, including the increasing complexity of society, the growing role that information and information technology play in people’s lives, and the fact that people from different countries and cultures live and work together more than ever. The U.S. — like the rest of the world — is becoming a knowledge society, not just a knowledge economy. The essential skills for success in today’s economy are critical thinking skills — abstract reasoning, problem solving, communication and teamwork. These are precisely the skills that are needed to build strong communities and societies wherever one lives.

Unless significant progress is made to close gaps in attainment, we cannot reach the 60 percent goal and will not reap the resulting benefits.

Unfortunately, it is a long-standing reality that educational success is very uneven. In particular, low-income and first-generation students, racial and ethnic minorities, immigrants and adults have traditionally been underrepresented among college students and graduates. As a result, these Americans are bearing a disproportionate share of the increasingly severe consequences of not completing postsecondary education. Since increasing higher education attainment is critical to a strong economy and a strong society, the fact that educational success is denied to so many in our nation can fairly and accurately be described as a crisis.

Since the first Stronger Nation report, Lumina has tracked and reported higher education attainment by race and ethnicity. These data paint an alarming and underappreciated picture. Unless significant progress is made to close gaps in attainment, we cannot reach the 60 percent goal and will not reap the resulting benefits. A closer look at 25- to 29-year-old Americans tells the story. Their overall higher education attainment rate was 37.8 percent in 2009. However, the rates vary significantly by race and ethnicity. The highest attainment rate in this young adult population is for Asians, at 65.6 percent, followed by non-Hispanic whites at 44.9 percent. The attainment rate for African-Americans is 24.7 percent, for Hispanics it is 17.9 percent, and for American Indians it is 16.9 percent.10

As worrisome as these attainment rate differentials are, there is an even more troubling trend in the data. Attainment rates for both Asians and whites between the ages of 25 and 29 are significantly higher than for the 30-and-above population, but the same is not true for African-Americans, Hispanics and American Indians. Attainment rates for young adult African-Americans are actually slightly less than for older African-Americans (24.7 percent vs. 25.0 percent), and for young American Indian adults they are substantially lower (16.9 percent vs. 21.6 percent).

These gaps in higher education attainment are complicated by growing gaps in attainment between women and men. In 2011, 45 percent of women between the ages of 25 and 64 held a two- or four-year college degree, compared to 40 percent of men. Among young adults between the ages of 25 and 29, the gap is twice as wide — 47 percent of women compared to 37 percent of men.11 The attainment rate for African-American men aged 25 to 34 (28 percent) was lower than that for African-American women (32 percent) in 2009, as it was for Hispanic men (16 percent) compared to Hispanic women (24 percent).12 When coupled with the loss of middle-skill jobs in occupations traditionally held by men, closing gender gaps in higher education attainment is increasingly urgent.13

A similar pattern emerges when examining the data on educational attainment for first-generation students — those whose parents did not attend or complete college. These students are less likely to attend college and are more likely to drop out prior to completion, in part due to their choices regarding courses, attending part-time, and other academic factors that have been shown to influence degree completion.14 Since first-generation students are an increasing proportion of the pool of potential students, increasing their success rates is essential to increasing higher education attainment.15

The attainment patterns for immigrants and low-income Americans tell the same story. Fifty-four percent of immigrants between the ages of 25 and 34 have completed high school or less as their highest level of education, compared to 36 percent of young adults whose parents were both born in the U.S.16 Helping these immigrant Americans to complete postsecondary education would greatly facilitate their full participation in the economy and society, to the benefit of all.

In 2008, 55 percent of high school graduates from the lowest income quintile enrolled in college directly from high school, compared to 80 percent of those from the top quintile.17 Low-income students are more likely to attend institutions with lower graduation rates and to attend part-time.18 As a result of these and other factors, four of five 24-year-olds in the upper income quartile hold four-year college degrees; this compares to only one of 10 in the lowest income quartile.19

Because people who complete postsecondary education earn more throughout their lives, these gaps in attainment increase income inequality. As in most advanced economies around the world, unequal success rates in postsecondary education are a major contributor to income inequality.20

Put bluntly, this is an intolerable situation. We are all diminished as Americans by an education system that effectively rations postsecondary opportunity based on people’s skin color, income or family status. Not only will the nation fall short of the attainment levels it needs unless these gaps are closed, the fact that the gaps exist must be rejected on moral grounds, given the increasingly severe consequences of not obtaining a postsecondary credential. America’s democracy and its economy are ill-served by a system that fails to tap all of our talent. At Lumina, we will redouble our efforts to close these gaps through our work, and we call upon all of our partners and stakeholders to do the same.

A national imperative

Throughout the nation, there is a much broader and deeper understanding of the need to increase postsecondary attainment. In recent years, some version of Goal 2025 has been adopted by or has become a major influence on the federal government, a majority of states, national higher education associations, many individual colleges and universities, and communities throughout the U.S. — including several large metropolitan regions.

We know we cannot reach the goal solely through our own efforts. Reaching Goal 2025 depends on the mobilization of thousands of educators (including faculty and administrators), elected officials, community leaders, business leaders, and other citizens — all of whom must understand the need to increase attainment and be willing to act to make it happen. It is our sincere hope that Stronger Nation and the data it presents will help guide and support those efforts to increase attainment throughout the nation.

  1. 1 All forms of high-quality postsecondary credentials, including degrees and certificates, have value and should count. Often, we refer to all of these credentials as “degrees” and the public and private institutions and other organizations that produce them as “college.” Likewise, the distinction between “postsecondary education” and “higher education” is of little value, especially if used to suggest a hierarchy of institutions and programs. We use the terms interchangeably.
  2. 2 Certificates: Gateway to Gainful Employment and College Degrees. Georgetown University Center on Education and the Workforce, 2012. The study estimates the number of Americans who hold a postsecondary certificate with “clear and demonstrable economic value” as their highest credential.
  3. 3 A Decade Behind. Georgetown University Center on Education and the Workforce, 2012
  4. 4 Georgetown University Center on Education and the Workforce, 2012
  5. 5 Hamilton Project at the Brookings Institution, 2011
  6. 6 2012 Talent Shortage Survey Research Results, Manpower Group
  7. 7 Boiling point? The skills gap in U.S. manufacturing. Deloitte and the Manufacturing Institute, 2011.
  8. 8 Federal Reserve Bank of Atlanta, 2011.
  9. 9 In the 2008 elections, among adults between the ages of 25 and 44, there was a stunning 32 percentage point gap between the voting rates of four-year college graduates and high school graduates. College Board, Education Pays, 2011.
  10. 10 Minorities in Higher Education, American Council on Education, 2011
  11. 11 U.S. Census Bureau, Current Population Survey (CPS), March 2011. Attainment rates reported by the CPS are generally slightly higher than those derived from the American Community Survey (ACS), as used in Lumina’s Stronger Nation reports.
  12. 12 The Educational Experience of Young Men of Color: A Review of Research, Pathways and Progress. Lee and Ransom.The College Board, 2011.
  13. 13 The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings. Autor, David, Community Investments, Volume 23, Issue 2, Fall 2011
  14. 14 First-Generation Students in Postsecondary Education: A Look at their College Transcripts, Xianglei Chen, National Center for Educational Statistics, 2005.
  15. 15 Ibid.
  16. 16 U.S. Census Bureau, Current Population Survey, 2009.
  17. 17 National Center for Education Statistics, 2010
  18. 18 Education Pays 2010, The College Board
  19. 19 Postsecondary Education Opportunity, Bachelor’s Degree Attainment by Age 24 by Family Income Quartiles, 1970 to 2008.
  20. 20 The Race between Education and Technology. Claudia Goldin and Lawrence F. Katz, 2008
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