Study: Peer Ability Plays a Role in Two-Year Completion Gap

By Brittany Hackett, Communications Staff

The large gap in completion between students who start their postsecondary education at two-year schools and those at four-year schools can be partly explained by difference in peers, according to a new study published by the National Bureau of Economic Research (NBER).

There has been much research on the existence of the completion gap, but there has not been much research on why it exists, despite evidence that the difference between the two types of institutions may influence outcomes. “Increasing college resources, altering peer exposure, streamlining transfer processes, and improving student preparation are quite distinct policy responses so distinguishing between these explanations is important,” the study authors wrote.

For the study, researchers examined data on over 3 million recent high school graduates, including data on all students who took the PSAT between 2004 and 2006, and enrollment and completion data from the National Student Clearinghouse (NCS). Their analysis mirrored previous research, showing that high school graduates are about 50 percentage points more likely to earn a bachelor’s degree within six years if they start at a four-year institution.

There are several possible explanations for this gap, beginning with what the authors call a “significantly lower” measure of college quality, such as peer ability or instructional spending, at two-year colleges compared with four-year colleges. Peer ability – or the academic achievement of a student’s peers – in particular could influence a student’s achievement at community colleges because of their open enrollment policies, for example.

The analysis shows that “more capable students tend to start at four-year colleges and also attend institutions with high-achieving peers,” which has a “much weaker” impact on community college students,” the authors noted. “Many four-year colleges are at least modestly selective (based on student achievement) while two-year colleges have open enrollment and students usually just attend the closest one.”

Another explanation is that two-year students face an additional barrier in the need to transfer schools to earn a bachelor’s degree, which can require additional applications, searches for programs, relocation, and a potential loss of completed coursework if credits do not transfer.

A final explanation is that the completion gap “could merely reflect selection and not the causal effect of initial sector per se,” according to the authors. In other words, students who attend community colleges may be less likely to complete because they have different intentions than students who attend a four-year institution.

The authors noted that wide completion gaps also exist within institutional sectors, and community colleges are no different. However, limited data on student outcomes from community colleges – and an inclination to group all community colleges together – makes it difficult to identify the sources of theses outcome disparities. According to the authors, “there is substantial variation in peer quality across two-year institutions and some two-year institutions actually attract students that are quite similar to less-selective four-year institutions.”

It is also a notable finding that peer ability is slightly more important at a four-year school, while students’ own ability seems to have more of an impact at a two-year school. The authors suggest that this could be the case because community colleges tend to have less structure and institutional support than four-year schools.

The findings of the study suggest that the decision of what school to attend “is even more nuanced than is typically discussed,” and indicate that some students who consider local two-year schools should also consider four-year options or two-year schools that are further away. And because accountability measures usually target individual institutions, “they miss an important determinant of two-year colleges’ success” like a successful transfer to a four-year institution.

“Similarly, policies that incentivize two-year over four-year enrollment, such as ‘free community college,’ may lower some students’ chance of receiving a bachelor’s degree, though, it depends on the relative college qualities a student faces,” the authors noted.


Publication Date: 10/13/2015

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