The Price of Non-Admission: Costs of Not Attending College

In President Obama’s first State of the Union Address in 2009, he specified that one of the goals of his administration was to make America the nation with the “highest proportion of college graduates in the world” by 2020. However, college enrollment in the US fell two percent during the 2012-2013 school year and is projected to continue to fall. In “The Returns to College Admission for Academically Marginal Students” by Seth D. Zimmerman, research suggests college education is beneficial for marginal students, with strong effects on future earnings, particularly for men.

The study tracks students applying to colleges in the Florida state university system for a period of 12 years, specifically focusing on Florida International University in Miami. By comparing the educational and economic outcomes of students who barely met the minimum requirements for being accepted into Florida International University with the outcomes of students who did not meet the requirements but were very close, the study gives an estimate on the effect of a college education for these “marginal” students.

Florida state law allows the schools in the Florida university system to develop their own rules for admission, but the state sets minimum levels of GPA and SAT scores that students must meet. Students generally have to have a GPA above 3.0 if their SAT scores are below 970 to be admitted into a Florida state university, unless the school makes an exception to the minimum requirements. However, only 10 percent of students at a school can be admitted without meeting the minimum requirements, making students with GPAs and test scores under the state recommended minimums less likely to be accepted. Because there is only a very small difference in academic credentials among these students and no significant demographic differences between the two groups, the outcomes of students just above the threshold provide a reasonable estimate of the effect that college would have had on students who just missed the cut.

The study shows that students who are just above the minimum requirements are 23 percent more likely to be accepted into Florida International University and 10 percent more likely to actually attend the school. The difference in long-term income between the two groups is also significant. Students in the group less likely to attend college had higher earnings in the five years after high school. However, after five years, the students who were in the group more likely to attend college made $1,600 a year more than the other students observed in the study. This trend continued for the next seven years that the students’ income levels were recorded, suggesting that the students who attended college had a better long-term economic outlook than the students who were not accepted.

The benefits of attending college were not equally distributed among all demographic groups. Eight to 12 years after applying to college women just over the threshold had very similar incomes to women just under the threshold, while men just over the threshold made an average of $4,000 more per year then men just below the threshold.

College attendance had greater positive effects on high school students from low-income households. High school students who received free lunch were presumably from households with lower income than students who did not receive free lunch. Students who received free lunch and were above the threshold made an average of $2,800 more a year more than students who received free lunch and were below the threshold, while students who did not receive free lunch showed only a $400 difference per year. Notably, male students who received free lunch were the students least likely to apply to school, even though they appear to have the most to gain from attending school.

The study provides evidence that attending a four-year university has significant economic benefits among comparatively low performing students. Even though this study is relatively narrow and only shows the effects of college education on people who applied to state schools in Florida, it suggests that accepting more high school students into college, particularly men and people from low income households, may help them improve their earnings even if their GPA and SAT scores would be too low to be admitted to many colleges.

Article Source: The Returns to College Admission for Academically Marginal Students, Zimmerman, Journal of Labor Economics, 2014.

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