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The Benefits of College for Marginal Students - 5/13/15

The issue of student debt has emerged as one of the most important in the nation’s economic dialogue.  Many have begun to question whether college represents a worthwhile investment, particularly for marginal students.  As indicated by a recent article penned by David Leonhardt, two recent, separate academic studies analyzed precisely this issue. 

The researchers tracked thousands of people over the last two decades in Florida, Georgia and elsewhere who had fallen on either side of a hard admissions cutoff.  For instance, some colleges require applicants to produce a certain grade point average or SAT score.  An applicant who just misses the cutoff is similar to one who attained it, except they don’t go to college. 

This supplies a form of natural experiment.  The two studies have come to remarkably similar conclusions – enrolling in a four year college generated large benefits for marginal students.  Data indicate that the students who scored just above the admissions cutoff earned substantially more by their late twenties than people just below it – twenty two percent more on average.

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.