Many factors affect why some students graduate from college and our review would not be complete without first considering the extent to which students with different characteristics advance to higher levels of education. Many students will complete their education without ever having enrolled in college. Figure 1 shows some of the differences in educational participation and attainment for a group of students who were followed over a 12-year period starting in the eighth grade. We reported in February 2002 that low-income, black, and Hispanic students complete high school at lower rates than other students. Students from these groups who graduate from high school also enroll in college at lower rates than their peers, even though the overall rate at which students enter college directly from high school has been increasing. According to research, factors such as family income and parents’ educational attainment influence students’ expectations about college. Low-income students and students from families in which neither parent has earned a bachelor’s degree were less likely to expect to finish college and ultimately enrolled at lower rates than other students. Academic preparation was also cited as a factor affecting postsecondary enrollment. Low-income, black, and Hispanic high school graduates were less likely to be well prepared academically to attend a 4-year college. Even among those who were qualified for college, however, low-income and Hispanic students were less likely to take college entrance examinations and apply for admission, two necessary steps for enrolling in a 4-year institution. There are a variety of postsecondary options for students after high school. Over 15 million students were enrolled in some type of higher education in the fall of 2000. Most students were enrolled in degree- granting 2-year or 4-year institutions. After considering their academic qualifications, students can choose to apply to institutions with varying levels of selectivity. Community colleges, for example, provide postsecondary opportunities for students who might not have the qualifications to start at most 4-year institutions. Additionally, students may wish to choose an institution based on its mission. For example, Minority Serving Institutions are recognized by statute, in part, for their mission to educate minority students. The institutions students attend have differing graduation rates. Institutional graduation rates may vary based upon such factors as the mission, selectivity, and type of institution. For example, institutions that focus on providing postsecondary opportunities to disadvantaged students—addressing Education’s goal of increasing participation in higher education—may have lower graduation rates than institutions that do not serve many disadvantaged students. To ensure that students and their parents have some information about how colleges are performing with respect to graduating their students, Congress passed the Campus Security and Student Right-to-Know Act. This act, as amended, requires that institutions participating in any student financial assistance program under Title IV of the Higher Education Act of 1965 disclose to current and prospective students information about the graduation rates of first-time, full-time undergraduate students. The law requires that institutions report the percentage of students who graduate or complete within 150 percent of the normal program completion time. This would mean that 4-year institutions would track groups of entering students over a 6-year period, and 2-year institutions would track groups of entering students over a 3-year period. While information collected as part of this act is the principal federal measure available to hold institutions accountable for their performance in graduating their students, there are currently no federal sanctions or incentives associated with college graduation rates. As part of discussions with the higher education community, Education has held panel discussions with student-aid experts, state officials, and business leaders, among other participants, about improving accountability. Four-year institutions calculate their graduation rate by determining the proportion of first-time, full-time students who enroll in a given year and have graduated from the same institution within a 6-year period. Students who have not graduated from the institution where they first enrolled by the end of the 6-year period are classified as not having finished a degree, even if they transferred and completed a degree at another institution. Data from Education’s 1995-96 Beginning Postsecondary Students (BPS) study—a longitudinal study which followed the retention and degree completion of students from the time they enrolled in any postsecondary institution over a 6-year period—illustrates how graduation rates are understated due to this treatment of transfer students. Figure 2 shows the completion status of the nearly 1.4 million students who started their postsecondary education at a 4-year institution in 1995-96 (no transfers into 4-year institutions from 2-year institutions or certificate programs were included). Over one-quarter of the students who started at a 4-year institution transferred from their first institution to another institution. If only those who completed a bachelor’s degree at the first institution of attendance are considered, the graduation rate is 51 percent. However, an additional 8 percent transferred to another institution and completed a bachelor’s degree within the 6-year period. Over half of students who enrolled in a 4-year college or university completed a bachelor’s degree within 6 years of beginning postsecondary education, according to our analysis of BPS data. However, background characteristics such as being black or a first-generation college student were associated with lower rates of completion. Whereas students were more likely to complete a bachelor’s degree within 6 years if, among other things, they had a more rigorous curriculum in high school, attended college full-time, were continuously enrolled, worked less than 20 hours per week, or did not transfer. After controlling for other factors, we found that disadvantaged students were no less likely to complete a bachelor’s degree than other students. Notwithstanding this fact, as we have noted, students from disadvantaged backgrounds are less likely to attend college in the first place. For various reasons, not all students who enroll in college will ultimately attain a degree. Based on Education’s 1995-96 BPS study, 52 percent of the estimated 1.8 million students who enrolled in a 4-year institution at some point during the subsequent 6-year period (including approximately 450,000 students who transferred from a less than 4-year institution) completed their bachelor’s degree. Of the 48 percent of students who had not attained a bachelor’s degree, nearly 14 percent were still enrolled in a 4-year institution at the end of the 6-year period, as shown in figure 3. See appendix II for completion rates by characteristics and appendix III for descriptions of the variables used in our analysis and a discussion of their levels of significance. Of the background characteristics we analyzed, being black or a first- generation college student was associated with lower completion rates. Students with either of these characteristics were about a third less likely to complete college as students without these characteristics. The completion rate for black students was 38 percent compared with 55 percent for both white and Asian students. As for students who had at least one parent with a bachelor’s degree, their rate of completion was 59 percent compared with 43 percent for students who were first- generation college students. Being a first-generation student affected completion regardless of race. For example, first-generation white students were no more likely to complete college than first-generation black students. Students who had a more rigorous high school curriculum and achieved better grades in high school and during the first year of college were more likely to complete college. About 80 percent of students who had the most rigorous high school curriculum completed college compared with 47 percent who had the least rigorous curriculum. Additionally, the higher the grades a student earned both in high school and in the first-year of college, the higher the likelihood of completion. Regarding first-year college grade point average, about 71 percent of students who earned higher than a 3.0 had completed college compared with 51 percent who earned between a 2.0 and 3.0. Students were more than twice as likely to complete college for every one-point increase in first-year college grade point average. Decisions students make regarding attendance, participation in collegiate clubs, and work had varying effects on completion. Students who were continuously enrolled during their studies were more than 6 times as likely to graduate than students who experienced one or more breaks from enrollment Additionally, students who attended college full-time were more than twice as likely to graduate as students who attended part-time or some combination of part-time and full-time, all other factors equal. Students who reported participating in collegiate clubs were one and one- half times as likely to graduate as students who did not participate. Less than half of students reported such participation. Students who worked 20 or more hours per week were less likely to complete a bachelor’s degree than students who did not work. However, working less than 20 hours per week was not associated with lower completion rates. Figure 4 illustrates bachelor’s degree completion rates by the number of hours worked per week. Transferring between institutions was also associated with a lower likelihood of completion in that students who transferred were a little less than half as likely to complete as students who did not. About 69 percent of students who started at a 4-year institution and did not transfer attained a bachelor’s degree compared with 47 percent of students who started at a 4-year institution and transferred to another 4-year institution. The rate of completion for students who started at a 2-year institution and transferred to a 4-year institution was roughly half of those who started at a 4-year institution and did not transfer. Figure 5 illustrates the bachelor’s degree completion rate after 6 years according to type of institution first attended and transfer status. After controlling for other factors, we found that disadvantaged students were no less likely to complete a bachelor’s degree than other students. However, as we have noted, students from disadvantaged backgrounds are less likely to attend college in the first place. While states and 4-year colleges and universities are employing various methods to foster bachelor’s degree completion, information on the effectiveness of these efforts is limited. Over two-thirds of the states responding to our survey reported having at least one effort in place to foster bachelor’s degree completion.