Home Accountability When Graduation Rates Are All about the Numbers, Are They Really?
When Graduation Rates Are All about the Numbers, Are They Really?

When Graduation Rates Are All about the Numbers, Are They Really?


Many years ago, I was a consultant in the management advisory services division at Price Waterhouse. With experience using computer modeling software from my MBA curriculum, I was assigned to a number of engagements building financial projections for businesses, large and small.

Probably the most frequently requested assignment was building a three- to five-year set of projections to be used in the companies’ strategic plans or for their banks and other sources of capital for growth funding. One of my most unique assignments was building financial projections for a horse farm that syndicated racehorses in dozens of partnerships. Another fairly unique assignment was spending 24 hours in a data room with a client’s CEO, building a model using historical financials from 18 supermarkets being auctioned one by one to the highest bidder.

Regardless of the assignment, I learned that the most important set of numbers wasn’t the final set of financial projections. Instead, it was the assumptions that drove those numbers.

Just about any experienced accountant could build a projection using inflation factors for expenses and growth factors for sales. Understanding and validating projections, particularly in a business planning a pivot or a merger, was often more complicated.

Colleges and universities are businesses too, although there are some politicians, writers, and academics who try their best to overlook or deny that fact. Often, I read that the measure of a college’s success should be a high graduation rate.

Not surprisingly, the 95 percent graduation rates of elite colleges and universities are cited as the aspirational target for all other colleges. Colleges with graduation rates below 50 percent are often referred to as “substandard” and not meeting the needs of their students. However, comparing the student population at a highly selective college or university to the student population at an open enrollment college is not an apples-to-apples comparison, and I am not specifically referring to the respective students’ high school GPAs or SAT/ACT scores.

A year or so ago, I signed a transfer agreement with a community college with a student population of 60,000. When the president and I reviewed the details of which students might be likely to transfer, I was told that only 12,000 students were seeking a two-year degree. The rest were either taking non-credit courses or were enrolled in certificate programs or workforce development programs.

Of the 12,000 students at that college who were seeking an associate degree, I was told that approximately 2,500-2,800 would graduate. When I asked what happened to the others, there were a number of answers:

  • Some of the degree-seeking students transferred to the state university after proving to themselves and their parents that they could succeed in college classes.
  • Some transferred because they changed their mind on their major, and the college did not offer that program.
  • Some dropped out due to work obligations.
  • Some dropped out due to family obligations.
  • Some dropped out due to financial issues.
  • Some dropped out due to medical issues.
  • Some flunked out.
  • Some switched over to a certificate program.
  • Some moved out of the area.
  • Some dropped out due to commuting issues.

If I were building a model to project college enrollment, persistence, and graduate rates, I would undoubtedly use different assumptions for the student body at a highly selective college or university than I would at an open enrollment college or university.

Critics of institutions with graduation rates that are less than 50 percent should ask the institutions why their students aren’t graduating. Of the multiple reasons that I listed previously, only a handful are within the college’s ability to control. A “free community college” initiative will not resolve most of these problems and may not, depending on the structure, resolve all of the financial issues.

All colleges and universities are businesses. I don’t doubt for a minute that presidents and CFOs of community colleges and open enrollment institutions are far more knowledgeable about the nuances of their students’ persistence and graduation rates than critics looking at a single number tracked and published by the Department of Education. If our goal is a better understanding of why students don’t graduate, why not ask those who know?

Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In September 2019, Dr. Boston retired as CEO of APEI and retired as APUS President in August 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. For four years from 2009 through 2012, APEI was ranked in Forbes' Top 10 list of America's Best Small Public Companies. During his tenure as president, APUS grew to over 85,000 students, 200 degree and certificate programs, and approximately 100,000 alumni. While serving as APEI CEO and APUS President, Dr. Boston was a board member of APEI, APUS, Hondros College of Nursing, and Fidelis, Inc. Dr. Boston continues to serve as a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA) and as a member and chair of the board of New Horizons Worldwide. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. In August 2020, the Board of Trustees of APUS appointed him Trustee Emeritus. In November 2020, the Board of Trustees announced that the APUS School of Business would be renamed the Dr. Wallace E Boston School of Business in recognition of Dr. Boston's service to the university. Dr. Boston lives with his family in Austin, Texas.


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