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How much does it cost to produce a community college graduate?

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Community colleges say they can’t help the neediest students get through college successfully without more funding. But these institutions, which educate 10 million students a year or 44% of all undergraduates, have a terrible track record; fewer than half their students end up earning degrees. Obviously, all those college dropouts aren’t improving local work forces. And state lawmakers aren’t keen to write community colleges blank checks without accountability. 

The problem is that no one really knows how much it costs to educate a community college student, or exactly how much more should be spent on the neediest ones, from young adults who are the first in their families to go to college, known as first-generation students, to older adults who are juggling a job and children of their own along with school, often called “nontraditional” students.

A first attempt at finding an answer was the publication of a paper in October 2022 that examined the costs of Texas community colleges. The analysis was conducted for the U.S. Department of Education’s research arm, the Institute of Education Sciences, by a team of researchers from the American Institutes for Research, a nonprofit research organization, and education finance specialists from Rutgers University and the University of Tennessee. (The American Institutes for Research is one of the many funders of The Hechinger Report.*)

The team applied the same cost analysis used in K-12 education to the community college context. In K-12 education, cost modeling helps states design per-pupil funding formulas that give more weight to English language learners, low-income students and students with disabilities. The idea is to give needier students more resources.

In the Texas analysis of six years of student records across all 50 community colleges, the researchers noticed that two categories – first-generation students and students older than 24 – were the least likely to hit various academic milestones, such as passing remedial courses, completing the first 15-credit semester hours, or earning a degree. At the same time, the researchers noticed that Texas community colleges were spending more on these students. Colleges that serve higher percentages of at-risk students had higher per-pupil expenditures than colleges that serve less needy students. 


“Funding is progressive, but it’s not progressive enough” to provide an equal opportunity for all students, said Jesse Levin, an economist at the American Institutes for Research and lead author of the study. 

According to the researchers’ cost modeling, it costs more than twice as much to achieve statewide average outcomes for a first-generation or older student than for a student without extra needs. Students from low-income households and English learners cost 19 to 31% more. But high school students who earn dual credits at community colleges are actually 16% cheaper to educate. That’s because dual-credit courses cost less to administer and high school students need fewer support services from local colleges.

This extra funding that the researchers suggest for needier students doesn’t guarantee that they’ll all end up with a college degree. But it might make it more likely that needier students could achieve average statewide outcomes at community colleges.

In Texas, the average community college student racks up a little more than two and a quarter success points, a metric that the state uses to award performance-based funding to colleges, which receive about 12% of their state funding this way. (Total state funding accounts for less than 25% of community college revenues in Texas with the rest coming from local property taxes and student tuition.) 

Earning a degree generates two success points, but students can rack up additional points along the way, including earning one point for passing a first college level course in math, one point for completing the first 15 credit hours, another point for completing 30 credits, and other measures of progress. (See Table 1A in the appendix for a list of success points.) A student who completes every milestone on the road to earning a degree could conceivably rack up eight points, so an average of two points is not a very high bar. 

Nonetheless, it can be expensive for many students to reach that standard. First-generation students made up half of Texas’s 750,000 community college students between the academic years 2014-15 and 2019-20. And it would cost $14,460 for a first generation college student who attends a small college to have the same opportunity to earn success points. That is more than three times the $4,537 that it would cost to educate a student with no extra needs attending a large community college to achieve statewide average outcomes. 

The colleges in Texas that serve the highest shares of first-generation college students actually spent $10,523 per full-time equivalent student, which was $1,475 less than the researchers’ estimated cost of $11,998. By contrast, the colleges that serve the fewest first-generation students spent less per student ($9,980) but the researchers said their estimated cost for an adequate education for these students was $10,385. That’s a much smaller $405 funding gap. 

The researchers also developed a simulation tool to allow community colleges and policymakers to tweak assumptions and come up with their own cost estimates. (There is no public link for this tool, but it is available upon request from**)

It’s worth emphasizing that these costs have nothing to do with an individual student’s costs, such as tuition and fees, or the financial aid and loans students receive. These are the estimated expenditures that a college would have to allocate for faculty and support services in order to level the playing field between the haves and have-nots.

It’s important to note that this is not an analysis of which support services are effective. It’s also not a bottom-up analysis of how much academic counseling each student needs and how much that costs. Instead, it is based on actual spending throughout Texas’s 50 community colleges over the six academic years from 2014-15 to 2019-20. The researchers calculated how much colleges spent per academic outcome (as measured by Texas’s success points) on their 750,000 students. Then they computed how spending per academic outcome varied for different types of students, based on how much harder it is for disadvantaged students to hit milestones. 

Additional cost adjustments were made for different kinds of institutions. Colleges in big cities have higher real estate prices and faculty salaries. Smaller colleges are more expensive to run because there are fewer economies of scale. For example, a bursar’s office that serves 10,000 students is cheaper per student to run than one that serves 1,000 students. 

Cost functions like these are often criticized for being “black boxes” because it’s hard to understand how researchers are using mathematical techniques to put a dollar total on how much it costs to reach an academic goal. And there’s no guarantee that if you gave colleges this extra money that they would actually succeed in raising the academic outcomes of first-generation and older students. Some challenges – juggling work, school and parenting – cannot be easily solved, even with unlimited money.

Nonetheless, Kate Shaw, a senior adviser at HCM Strategists, a consulting firm that works with schools and colleges, described this first attempt at community college cost analysis as a “game changer” at a January 2023 seminar on higher education by the Education Writers Association. If policymakers accept these cost analyses, it could give colleges more incentive to serve the neediest students. But we also need to know how to spend the money wisely and the most cost-effective ways to help students who need more support get through college quickly.

This story about community college costs was written by Jill Barshay and produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

* An earlier version of this story omitted the disclosure that the American Institutes for Research is one of the many funders of The Hechinger Report.


** An earlier version of this story directed readers to a different e-mail address. Because of the number of requests, the American Institutes for Research asked that we redirect readers to a new address.

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