Student Outcomes at Community Colleges: What Factors Explain Variation in Loan Repayment and Earnings?

Community colleges play an important role in providing access to higher education and promoting economic mobility, but student outcomes vary widely across institutions. Although community colleges have been largely excluded from recent federal accountability action, the potential re-regulation of Gainful Employment raises the question of whether these schools should be subject to future accountability measures. If variation in student outcomes across community college programs is correlated with factors and policies under an institution's control, this would suggest that there are "levers of action" that a college can pull to improve student outcomes. However, if variation is primarily explained by factors that are outside of an institution's control, such as the characteristics of students the school serves, then accountability policies could penalize community colleges for fulfilling their mission of providing access to their local communities. To shed light on these questions, we examine the program-, institution-, and state-level correlates of community college student outcomes, using program-level data on post-college earnings and loan repayment for more than 1,200 community colleges. We find that student demographics are correlated with net earnings and loan repayment, largely because programs that enroll more underrepresented minority and female students have worse outcomes. Student demographics explain a relatively small share of the variation in earnings and repayment. In contrast, field of study explains most of the variation in net earnings across programs and much of the variation in loan repayment. Moreover, after controlling for field of study, we find a positive association between the share of students in a program who are underrepresented minorities and net earnings, suggesting that programs that enroll more Black and Hispanic students are more likely to be in fields that lead to smaller earnings gains. Finally, we show that institutions that enroll the largest shares of minority students tend to offer fewer programs with high earning premia and more seats in programs that have lower net earnings, on average. These findings have significant implications for devising federal accountability standards and underline the importance of both providing incentives for institutions to offer programs that lead to economic stability and supporting the important role this sector plays in providing equitable access to a postsecondary education. [This report was produced by the Hutchins Center on Fiscal & Monetary Policy at Brookings.]