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What Sort of Degrees Do College Incentives Encourage?

Funding colleges based on the number of degrees they award may boost the wrong types of credentials for students, finds a new study of Washington state policy.

States and the federal government alike have been considering ways to evaluate or fund colleges based on the number of students who complete their degree programs.The intention is to spur colleges to do more to reduce high dropout rates, particularly among students from lower-income and first-generation college-going families.

That was the point of Washington's 2007 Student Achievement Initiative, which rewards community colleges for improving student retention, progress in gaining college-level math skills, and completion of certificates, apprenticeships, and associate degrees.

Researchers Nicholas Hillman of the University of Wisconsin-Madison, David Tandberg of Florida State University, and Alisa Fryar of the University of Oklahoma analyzed student retention and degree completion before and after the policy was enacted, comparing the data to the trends of students in community colleges nationwide, as well as those in Western and neighboring states. The researchers also matched Washington's student groups with those in community colleges with similar retention and degree completion before 2007.

They found student retention rates did go up at some community colleges after performance funding was implemented—but it declined at others, and there was no significant change on average. Moreover, while students earned more short-term professional certificates in the years following the policy, colleges actually awarded the same or fewer associate degrees, which are significantly more valuable for careers in the long term than certificates.

Even the boost in certificate awards may have been spurred by pressure from local employers as much as policy changes; the researchers noted that Boeing Corp. partnered with one of the community colleges to open a job-training program, which boosted the number of certificates there fivefold.   

"Short-term certificates are an easier approach than two-year completion or graduation. They're the path of least resistance for schools," Tandberg said in a statement on the study. "However, short-term certificates often don't provide any benefits over a high school diploma."
 

Washington has since changed its policy to reward colleges for students earning short-term certificates only if they lead to advanced credentials or well-paying jobs. 

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