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December 23, 2015 at 4:44 pm

Forbes: Economics Undergrads Correlate Tuition and Graduation Rates

Three Ohio University undergraduates authored a column in Forbes on “Schools Charging by the Credit Hour Have Lower Graduation Rates.”

The trio—Rob Hammer, David Holman, and Sam Kissinger—are undergraduates at Ohio University and work as research associates at the Center for College Affordability and Productivity. Hammer and Kissinger are Economics students. Dr. Richard Vedder, Distinguished Professor of Economics Emeritus at Ohio University, is Director of the Center for College Affordability and Productivity,

When people think about college, they usually think of it as a four year commitment. This however, is not the norm for most students enrolled at four-year public universities. According to the National Center for Education Statistics, the average national graduation rate at four-year, public schools was only 33.5% for the entry cohort of students in 2007. This means that by 2011, only about one-third of students who enrolled 4-years earlier had graduated from their entry school—the rest had either transferred, dropped out, or had taken more than four years to complete their degree….

So what can schools do to increase their graduation rates? One possibility is structuring their tuition pricing models to encourage students to take more credit hours per semester. While there are many different ways that schools price per credit hour, they can essentially be broken up into two different models. Schools can either charge by the credit hour—meaning that each additional hour a student takes will increase their tuition cost—or schools can charge a base tuition rate and not charge full time students extra per hour. In many cases, there is a cap on “free” hours (generally at the 18th hour) but this is largely inconsequential because students rarely take more than 18 hours, regardless of tuition model.

Over the last several months we have contacted numerous four-year public schools, requesting data on the number of students enrolled in each amount of credit hours (ranging from 0 to 25) and the type of credit hour model the school used for the 2015 fall semester. Of the 100+ schools we contacted, we received responses from nearly 70 schools, which exhibited both types of models….

Read their column to see what their correlations their regression analysis showed between tuition models and graduation rates.

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