Equity Gaps Are an Expensive Problem

Equity gaps are not only unjust; they are also expensive.

The term “equity gap” refers to systematic differences in outcomes that vary across student groups. Nationally, Black, Hispanic and Native American students graduate at lower rates than their white and Asian counterparts at four-year and two-year colleges alike.

These gaps don’t exist because certain types of students are lazier than others. They are the consequence of institutional problems. And institutional problems exact institutional costs. Publicly identifying those costs is an important first step in closing equity gaps.

Estimating the cost of equity gaps is conceptually simple—by definition, they are the difference between what a group of students did experience and what they could have experienced given proper institutional support.

Consider my alma mater, the College of DuPage, a suburban community college in Illinois with roughly 21,000 students. For the cohort of first-time, full-time, degree-seeking students who began in 2017, the completion gap between Black and white students after three years was roughly 15 percentage points. Approximately 10 percent of Black students completed a degree, while 25 percent of their white counterparts did.

How many more Black students would have completed programs if the completion gap didn’t exist?

Simply put, an additional 15 percent of the cohort’s 161 Black students—24 of them, precisely—would have completed a degree in the absence of a completion gap.

We can similarly calculate the gap for other student groups. The graduation rate was 21 percent for Asian students and 18 percent for Hispanic students. In the absence of a completion gap, an additional eight of the cohort’s 203 Asian students and 35 of its 532 Hispanic/Latinx students would have completed. In total, roughly 67 additional College of DuPage students would have completed programs by 2020.

These are conservative estimates. They don’t assume that all students would have completed a degree, only that all student groups would have the same likelihood of completion as the group most likely to complete. In the College of DuPage’s case, that was white students, but white students aren’t always the reference group.

Consider transfer rates. If the College of DuPage transferred all students at the rate that it transferred Asian students—39.9 percent for 2020—I estimate it would have transferred approximately 215 more students from that cohort, including 16 more Black students, 95 more Hispanic students and 104 more white students. (For the purposes of this analysis, I have only included four racial and ethnic categories—Asian, Black, Hispanic and white—omitting all others.)

Dropout rates tell a similar story. If Black, Hispanic and white students had dropped out at the same rate as Asian students (about 20 percent in 2020), approximately 223 fewer students would have dropped out in 2020.

Over the last decade, I estimate the College of DuPage lost about 2,850 students to the dropout gap. With this knowledge, we can go one step further: we can estimate how much tuition revenue was lost to the dropout gap given reasonable estimates of the number of additional courses retained students would have taken.

If each additional retained student had taken just one more three-credit course in their third year at the College of DuPage, I estimate the college would have made about $92,000 in additional tuition revenue in 2020 and more than $1 million over the last decade. If each student took one additional full-time semester—12 credit hours—I estimate the college would have received nearly $370,000 in 2020 and about $4.7 million in additional tuition revenue over the last decade.

Often, stakeholders, lawmakers and the public balk at the idea of focusing resources on students whom they perceive as inherently less likely to succeed. These resources, goes the logic, would be better spent on students who will provide a surer return on the investment. But this framing misses the simple fact that equity gaps themselves cost resources to maintain. They are an expensive problem to have.

The College of DuPage is not unique in this sense, nor are its equity gaps outside the norm relative to its peer institutions. Nationally, 21 percent of Hispanic students and 13 percent of Black students attending public community colleges graduate within three years, compared to 32 percent of Asian students and 27 percent of white students.

Of course, missing completions, nontransfers, stop-outs and lost tuition revenue aren’t the only symptoms of inequity, but they are among its most visible. They are reductive measures of a deeper problem, but they are important measures nonetheless. They show us how higher education’s financial, retention and equity problems are the same problem.

They also provide compelling evidence that addressing equity gaps is not only the just course of action, but that doing so is in a college’s best financial interest as well.

Equity gaps are a problem of injustice, but they also have a corrosive financial effect. Equitable and financially sound policy choices don’t always overlap. When it comes to equity gaps, they do. Equity gaps are expensive, morally and financially. Closing them needs to be a priority at all colleges.