President Obama’s 2012 State of the Union Speech called for a dramatic increase in the number of US college graduates.  At the same time national trends indicate that the time to complete a bachelor’s degree continues to increase, with more than half of graduates taking more than four years to completion (Baccalaureate and Beyond Longitudinal Study, 2009-09 cohort).  This issue is particularly salient in Texas, where Governor Rick Perry and the Regents of the University Texas have repeatedly called for increased efficiency in public higher education, including incentives to complete a college degree in less than four years and for less than $10,000.  It is unclear, however, if extended time-to-degree is caused by demand-side factors (labor markets changes, reductions in ability to pay for higher education, or reduction in student motivation) or supply-side institutional factors (reduced financial aid, more rigorous graduation requirements, inadequate student counseling).  This study will inform the design of policies to accelerate time-to-degree in a high-stakes policy setting by examining contributing factors in Texas.

While there is a growing body of rigorous evidence regarding the factors that influence college graduation, the issue of time to degree has received less attention.  As a result, it is unclear if students or institutions should be the target of policy interventions.  Bound, Lovenheim, and Turner (2012) compared changes in demand and supply-side factors for the NLS 1972 cohort and the NELS 1988 cohort and found that nationwide decreases in public funding for public education had a greater effect on time-to-degree than changes in student preparation.  Our study will build on this research using a longitudinal data set that includes all students who enrolled in Texas public colleges and university from 1992 to 2012.  Data from the Texas Higher Education Coordinating Board on student background, degree progress, and attainment are merged with IPEDS data on institutional funding levels to examine the effects of changing state investments on student progress.  We will also exploit discontinuities in the longitudinal data due to policy changes (such as increased high school graduation requirements implemented in 2007) to determine the effects of state policies regarding the quality of public education.  We will use fixed-effects regression models and Blinder-Oaxaca decomposition techniques to estimate the effects of changing demand and supply-side factors and to analyze the proportion of longitudinal variance in time-to-degree that is explained by changes in student demographics and ability, changes in state funding policies, changes in quality regulation, and exogenous factors such as labor market opportunities.

This study will make a significant contribution to higher education policy by identifying policy levers that can be used to incentivize students to complete college while providing appropriate institutional incentives for public colleges and universities.