Gonzalez Canche`, M.S. (2014). Is the community college a less expensive path toward a bachelor’s degree? Public 2- and 4-year colleges’ impact on loan debt. The Journal of Higher Education, 85 (5), pg. 723-759.
Gonzalez Canche` (2014) analyzed differences of loan amounts that students from two year public colleges compared to students attending four year public institutions in order to see if there is a difference between loan borrowing behavior among the two groups. The author used the Kernel matching procedure and the Ordinary Least Squares method to compare the two groups to determine if there is a significant difference (pg. 740). According to the previous studies cited in the article, students who attended for-profit institutions had the highest default rate with student loans, but previous studies did not account for student characteristics who may choose a for-profit versus non-profit institution (pg. 728).
After Gonzalez Canche(2014) studied the different types of institutions students attend and matched students on various characteristics, is was determined that student who attended more affluent colleges and universities had lower amounts of debt upon graduation as well as a decreased likelihood of defaulting on loans that were taken out (pg. 727). For example, if a student attend a private, non-profit college with a higher level of socioeconomic statuses among students, than the students will be less likely to obtain student loan debt or default on their loans compared to students at less selective four-year universities or community colleges. Gonzalez Canche
believes this is due to the students’ at more selective colleges having “more support to attend college from both of their parents, relatives, high school teachers and counselors” (pg. 740). In fact, it was noted that “community college students systematically had fewer sources of support than their counterparts in the four-year sector”, which could lead to community college students having higher loan amounts and are “at a greater risk of dropping out before earning their degree” (pg. 748).
Gonzalez Canche(2014) points out that policymakers tend to encourage low-income students to attend community college prior to four-year universities, but according to the findings, this may not be the best option for low income students who also have “high probabilities of succeeding academically and professionally” (pg. 749). Even though community college students tended to have less support when pursuing their degree, the study found that students who began at the community college had similar amounts of loan debt upon graduation compared to their counterparts who started at the four-year public college (pg. 750). Gonzalez Canche
recommends that policymakers, and others who work with students, should not necessarily tout the two year community college as a less expensive option and that it may, in fact, be better for some low and middle-income students to begin directly at the university (pg. 752).
After these findings from Gonzalez Canche`, policymakers, teachers and counselors in high schools, and admissions staff at community colleges and universities should be aware of the additional debt that may be accrued while students attend community college, as a result of likely taking additional time to complete their degree, and additional student loan debt, compared to if the student would have started directly at the university. It cannot be ignored that Washington state has one of the highest amounts of state need-based grants for low-income students, so the university may be a more realistic and financially responsible decision for low-income students who qualify for need-based aid programs.