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Students who enrolled in community colleges were significantly less likely to earn bachelor's degrees and had lower early-career earnings than peers who went directly to four-year institutions, but those who ultimately transferred to four-year colleges performed equally to those who went directly into four-year institutions, a new study has found.

The research, conducted by the Center for Analysis of Postsecondary Education and Employment at the Community College Research Center at Columbia University's Teachers College, examines terrain that has become increasingly important as more students (often encouraged by policy makers) consider enrolling in two-year institutions because they are less expensive. 

The better financial deal that community colleges may seem to be on paper only pans out, though, if students who choose that path fare well academically and in the workforce.

Like most studies on this topic, the new one -- which is based on data from the State Council of Higher Education for Virginia and from the National Student Clearinghouse -- presents mixed results.

Students who enrolled in Virginia's two-year institutions in 2004 were significantly less likely to earn a bachelor's degree within eight years than were their peers who enrolled in a four-year institution that year.

They also had somewhat lower average earnings in 2012, though the gap shrank to a nonstatistically significant amount when the two populations of students were compared to students most like them. (The researchers acknowledge that the four-year students who remained in the state might have weaker earnings potential than those who left Virginia, and therefore wouldn't have been reflected in the state's wage records.)

Fewer than a quarter of the students who started out in community colleges in 2004 and aspired to earn a bachelor's degree eventually transferred to a four-year institution. When the researchers compared the transferring students to similarly situated "native" four-year-college students (those who enrolled directly into those institutions), they found that "vertical transfer students are much more likely than their similar native peers to graduate within eight years of college entry, and suffer few or no negative labor market impacts at that time."

The researchers dug into the data to try to gauge the validity of some of the traditional explanations for community college students' perceived underperformance.

They found that community college students took lower course loads in their second year than did their peers who started at four-year institutions, and were four percentage points less likely to complete the courses in which they enrolled in that second year. That suppressed the number of completed credits for community college students by three, on average.

The data also supported the idea that the "idiosyncratic path" to a four-year institution deters many students who might have transferred. Only 68 percent of those who earned associate degrees and 57 percent of students who earned more than 60 college-level credits at two-year institutions transferred. Additionally, 15 percent of those who transferred did so in their first or second year (presumably before having earned the 60 credits generally expected for transfer), and another 15 percent transferred seven or eight years after entering the two-year institution. And the number of college-level credits accumulated by transferring students ranged from zero to 184.

"Those patterns seem to suggest there is no well-trodden, highly structured pathway for transfer students to follow," the authors write.

When the lower costs of attending two-year institutions are taken into account, the researchers write, "vertical transfers reap strong financial benefits from the community college pathway -- in part due to two-year colleges' lower expenses, but also in part due to these students' stronger attachment to the labor market during their community college enrollment period."

The authors acknowledge the possibility, though, that the positive short-term labor market outcomes the community college transfers show might plateau if studied over a longer period of time.

The paper's authors are Di Xu, an assistant professor at the University of California at Irvine, Shanna Smith Jaggars, director of student success research for the Office of Distance Education and E-Learning at Ohio State University, and Jeffrey Fletcher, a doctoral student in economics and education at Columbia.

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