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Ten million more graduates in 20 years | McKinsey
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mck-o-container--mobile-spacing mdc-u-grid mdc-u-grid-gutter-xxl"><section data-layer-region="article-body-header" class="mdc-u-grid mdc-u-grid-col-md-12 mck-u-animation-blur-in-400 byline-share-container"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-7 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-8 mdc-u-ts-10"></div></section><section class="mdc-u-grid mdc-u-grid-col-md-12 mck-u-animation-blur-in-400"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><div data-component="mdc-c-description" class="mdc-c-description___SrnQP_8032924 mdc-u-ts-5"><div class="mck-u-links-inline">With bold, decisive action, the US higher education sector could expand its impact, deliver on its promise of more-equitable outcomes, and improve the nation’s economic competitiveness.</div></div></div></section><main data-layer-region="article-body" class="mdc-u-grid mdc-u-grid-gutter-xxl"><div class="mdc-u-grid mdc-u-grid-col-1 mdc-u-grid-col-md-12"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><div class="mdc-o-content-body mck-u-dropcap"> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="DownloadsSidebar_mck-c-downloads-sidebar__iFmyt mck-o-xs-right-span"><div data-layer-region="downloads-right-rail"><h3 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_8032924 mdc-c-heading--title___5qyOB_8032924 mdc-c-heading--border___K8dj3_8032924"></h3><div><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_8032924"><div class="mdc-u-align-center DownloadsSidebar_mck-c-downloads-sidebar__fullreport__pTrE3"><img class="DownloadsSidebar_mck-c-downloads-sidebar__fullreport__pTrE3 DownloadsSidebar_mck-c-downloads-sidebar__fullreport--image__RcOxJ" alt="" src="/~/media/mckinsey/industries/education/our insights/fulfilling the potential of us higher education/fulfilling-the-potential-of-us-higher-education_thumbnail.jpeg"/></div><div></div><a data-component="mdc-c-link" href="#/download/%2F~%2Fmedia%2Fmckinsey%2Findustries%2Feducation%2Four%20insights%2Ffulfilling%20the%20potential%20of%20us%20higher%20education%2Ffulfilling-the-potential-of-us-higher-education.pdf%3FshouldIndex%3Dfalse" class="DownloadsSidebar_mck-c-downloads-sidebar__download-link__fPqFQ mdc-c-link___lBbY1_8032924" target="_self" data-layer-event-prefix="Download Link" data-layer-action="click" data-layer-report-type="" data-layer-file-name="fulfilling-the-potential-of-us-higher-education" data-layer-report-name="fulfilling-the-potential-of-us-higher-education>"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_8032924 mdc-c-icon--size-md___yi5fA_8032924 mck-download-icon"></span><span class="mdc-c-link__label___Pfqtd_8032924"> (26 pages)</span></a></div></div></div></div> <p><strong>The US higher education system</strong> faces crises on multiple fronts. Enrollment growth is slowing, student debt is at an all-time high, the sector is not delivering on its promise of greater equity, and its reputation among many Americans is declining.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="0c8f8956-4366-4f83-a874-20e2bce52d0f"><sup class="FootNote_footnotesup__e73z_">1</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="0c8f8956-4366-4f83-a874-20e2bce52d0f" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Jon Marcus, “Colleges face reckoning as plummeting birthrate worsens enrollment declines,” <em>Hechinger Report</em>, May 22, 2021; Melanie Hanson, “Student loan debt statistics,” EducationData.org, February 10, 2023; Diana Ellsworth, Erin Harding, Jonathan Law, and Duwain Pinder, “<a href="/industries/education/our-insights/racial-and-ethnic-equity-in-us-higher-education">Racial and ethnic equity in US higher education</a>,” McKinsey, July 18, 2022; Doug Lederman, “Despite positive experiences, students question value of college,” <em>Inside Higher Ed</em>, July 7, 2021.</span></span></span></a></span> We believe there is a challenging but clear solution. Higher ed must remain focused on its core mission of educating learners but evolve its practices to serve more Americans. Our analysis suggests that the sector should aspire to a bold goal: graduate ten million more students than currently projected over the next 20 years. This goal is ambitious, but the data show there is a pathway to achieving it in a way that successfully addresses the sector’s challenges rather than exacerbating them.</p> <div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="lightest-grey" data-module-category="" data-module-gradient-position="bottom-right" class="mck-c-inline-module-container SideBar_mck-c-sidebar__bgimg-wrapper__Qj4Dt mck-o-sm-left-span SideBar_mck-c-sidebar__sidebar-wrapper__Dpjw2 SideBar_mck-c-sidebar__sidebar-wrapper--istablet__IQ6ii mck-u-screen-only mck-c-module-wrapper" data-layer-region="sidebar"><div class="SideBar_mck-c-sidebar__epoAm mck-o-md-center"><div class="SideBar_mck-c-sidebar__share-icons-wrapper__9gB_c"><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_8032924 mdc-c-link-container--display-column___X0HDD_8032924 SideBar_mck-c-sidebar__share-icons___eQy6"><button data-component="mdc-c-button" aria-label="Expandable Sidebar" type="button" id="button_id" class="mdc-c-button___U4iY2_8032924 mdc-c-button--ghost mdc-c-button--size-medium SideBar_mck-c-sidebar__toggle-btn__EL8iE" aria-expanded="false" data-layer-event-prefix="UI Item" data-layer-action="click" data-layer-category="sidebar" data-layer-subcategory="open" data-layer-text="open sidebar"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_8032924 mdc-c-icon--radial___y3csX_8032924 mdc-c-icon--size-xxl___cL3ZT_8032924 mck-plus-no-circle-icon"></span></button></div></div><div class="SideBar_mck-c-sidebar__content-outer__UdWCq"><div class="SideBar_mck-c-sidebar__eyebrow__5GSEq"></div><div class="SideBar_mck-c-sidebar__content__raEwe"><h2 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_8032924 mdc-u-ts-3 SideBar_mck-c-sidebar__content-heading__NJekY"><div>About the authors</div></h2><div class="SideBar_mck-c-sidebar__content-description__4p9iI mdc-u-ts-7"><div class="mdc-o-content-body"><p>This article is a collaborative effort by Diana Gonzalez, <a href="/our-people/jonathan-k-law">Jonathan Law</a>, <a href="/our-people/fiyinfolu-oladiran">Fiyinfolu Oladiran</a>, Ted Rounsaville, <a href="/our-people/saurabh-sanghvi">Saurabh Sanghvi</a>, and Doug Scott, representing views from McKinsey’s Education Practice.</p></div></div></div></div></div></div> <p>Bachelor’s degrees, associate’s degrees, and Title IV–eligible certificates remain among the most proven enablers of economic mobility and individual empowerment in the United States.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="a6a61e8a-8deb-40bf-998a-71d18ca4103d"><sup class="FootNote_footnotesup__e73z_">2</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="a6a61e8a-8deb-40bf-998a-71d18ca4103d" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Jennifer Ma, Matea Pender, and Meredith Welch, <em>Education pays 2019: The benefits for individuals and society,</em> College Board, January 2020.</span></span></span></a></span> Controlling for sociodemographic variables, graduates with bachelor’s degrees earn a median of $450,000 (for women) to $655,000 (for men) more over their lifetimes than those who have only a high school diploma, and studies show that this earnings premium is increasing.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="68b5a475-0beb-4727-9ec9-5c3da3a4d99d"><sup class="FootNote_footnotesup__e73z_">3</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="68b5a475-0beb-4727-9ec9-5c3da3a4d99d" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">“Education and lifetime earnings,” US Social Security Administration, November 2015; ChangHwan Kim, Arthur Sakamoto, and Christopher Tamborini, “Education and lifetime earnings in the United States,” <em>Demography,</em> August 2015, Volume 52, Number 4.</span></span></span></a></span> Furthermore, a postsecondary degree has significant nonmonetary benefits, from better health outcomes to greater civic engagement.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="1d618f8e-7f5e-431c-b195-8b208c16d529"><sup class="FootNote_footnotesup__e73z_">4</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="1d618f8e-7f5e-431c-b195-8b208c16d529" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline"><em>Education pays 2019,</em> January 2020.</span></span></span></a></span> For society, these benefits have compounding effects on the economy through GDP gains, increased tax payments, and reduced reliance on social services.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="a28bb390-3431-4129-ac53-353db269fc34"><sup class="FootNote_footnotesup__e73z_">5</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="a28bb390-3431-4129-ac53-353db269fc34" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Analysis based on data from College Board; The Institute for College Access & Success (TICAS); Integrated Postsecondary Education Data System (IPEDS), National Center for Education Statistics (NCES), US Department of Education; National Student Clearinghouse; US Census Bureau; and US Department of Education.</span></span></span></a></span></p> <p>The benefits of a postsecondary degree are clear, but they are not distributed equally throughout society. Black and Hispanic Americans have the lowest rates of educational attainment, with only 21 percent of Hispanics and 28 percent of Black Americans having a bachelor’s degree or higher, compared with 42 percent of non-Hispanic Whites and 61 percent of Asian Americans.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="7dfc9c50-58b6-4a12-9316-455d4da34710"><sup class="FootNote_footnotesup__e73z_">6</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="7dfc9c50-58b6-4a12-9316-455d4da34710" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">“Census Bureau releases new educational attainment data,” US Census Bureau, February 24, 2022.</span></span></span></a></span> Benefits are also distributed unequally across institutions; many schools, particularly those that serve a significant share of underrepresented and low-income students, fail to graduate large percentages of their student body every year, leaving millions in debt with no diploma to show for it.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="ea9b0a84-8eb2-402b-b0b9-0d4f04deaabc"><sup class="FootNote_footnotesup__e73z_">7</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="ea9b0a84-8eb2-402b-b0b9-0d4f04deaabc" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Analysis based on data from College Board, IPEDS, National Student Clearinghouse, NCES, TICAS, US Census Bureau, and US Department of Education.</span></span></span></a></span></p> <p>In another troubling trend, enrollment rates have declined across the board in recent years, largely due to three factors: a drop in the US birth rate since the Great Recession, changing perceptions about the costs and benefits of earning a degree, and fallout from the COVID-19 pandemic.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="e6a95a12-7a56-424d-beb5-964ff247bbf4"><sup class="FootNote_footnotesup__e73z_">8</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="e6a95a12-7a56-424d-beb5-964ff247bbf4" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Jill Barshay, “College students predicted to fall by more than 15% after the year 2025,” <em>Hechinger Report</em>, September 10, 2018; Colleen Campbell, “Those left behind: Gaps in college attainment by race and geography,” Center for American Progress, June 27, 2019.</span></span></span></a></span> Even as enrollment has fallen, however, demand for workers with degrees has risen. Our analysis indicates that 86 percent of new jobs projected to be created through 2030—in fields such as nursing, teaching, and cybersecurity—will likely require postsecondary education.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="bd4db24c-48d6-4721-87dc-4c6934867fad"><sup class="FootNote_footnotesup__e73z_">9</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="bd4db24c-48d6-4721-87dc-4c6934867fad" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Analysis based on data from Integrated Public Use Microdata Series (IPUMS), International Labour Organization, Moody’s Analytics, Occupational Information Network, OECD, Oxford Economics, US Bureau of Labor Statistics (BLS), US Census Bureau, US Census Bureau’s American Community Survey (ACS), and World Bank.</span></span></span></a></span> This talent shortage represents a significant risk to the nation’s public health, education, security, and global competitiveness. </p> <p>Finally, as student loan debt has increased, so too has skepticism about the value of postsecondary education—a shift that has been exacerbated by the pandemic. In May 2021, 65 percent of college students surveyed agreed with the statement that higher education is no longer worth the cost, up from 57 percent in December 2020 and 49 percent in August 2020.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="d63680db-abe0-4160-8143-7afe6d65b626"><sup class="FootNote_footnotesup__e73z_">10</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="d63680db-abe0-4160-8143-7afe6d65b626" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Rachel Fishman et al., “One year later: COVID-19’s impact on current and future college students,” Third Way, June 29, 2021.</span></span></span></a></span></p> <p>These statistics raise a pressing question: how can the sector improve its value proposition and extend the benefits of higher education to more Americans while creating more-equitable economic mobility and a stronger economy? Two steps are necessary.</p> <p>First, while there is capacity in the system, higher ed institutions must demonstrate that they can successfully graduate their students before expanding enrollment. It is especially important that schools demonstrate the ability to graduate the most vulnerable students. An analysis of enrollment and completion reveals that only 11 percent of the available capacity in the higher education sector is at schools that have both above-average completion rates and an above-average share of students eligible for federal Pell Grants for low-income students.</p> <p>The sectorwide average completion rates for bachelor’s and associate’s degrees—64 and 34 percent, respectively—make it difficult to justify expanding enrollment further.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="bed9ac5e-9904-4338-bcf1-4699154f5c57"><sup class="FootNote_footnotesup__e73z_">11</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="bed9ac5e-9904-4338-bcf1-4699154f5c57" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">“Undergraduate retention and graduation rates,” NCES, May 2022.</span></span></span></a></span> However, an institution-by-institution view reveals a more nuanced story and demonstrates that there is real potential for significant systemwide improvement (exhibit).</p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-inline-module-container mck-o-md-center"><div class="mck-c-content-header"><div class="ContentHeader_mck-c-content-header__eyebrow__cBTe_"></div></div><div class="mck-u-inline-module-border-bottom"><picture data-component="mdc-c-picture" class="Exhibit_mck-c-exhibit__image__pyIDm"><source media="(min-width: 768px)" srcSet="/~/media/mckinsey/industries/education/our%20insights/fulfilling%20the%20potential%20of%20us%20higher%20education/svgz-fulfilling-the-potential-of-us-h-ed-ex6.svgz?cq=50&cpy=Center"/><img alt="There is a more than 45-percentange-point gap in completion rates between top- and bottom-quartile two- and four-year institutions." src="/~/media/mckinsey/industries/education/our%20insights/fulfilling%20the%20potential%20of%20us%20higher%20education/svgz-fulfilling-the-potential-of-us-h-ed-ex6.svgz?cq=50&cpy=Center" loading="lazy"/></picture></div><div class="mck-u-sr-only"></div></div> <p>First, completion rates vary widely by institution for both bachelor’s and associate’s degrees. Second, there are big differences between high- and low-performing schools when controlling for the type of institution and the share of Pell Grant–eligible students. Even when adjusting for institution peer group by Carnegie Classification—a framework for describing institutional diversity in US higher ed—the average gap in completion rates between high- and low-performing two- and four-year institutions remains 30 percentage points.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="a8ab52af-e9b9-4549-92d3-f6598226a888"><sup class="FootNote_footnotesup__e73z_">12</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="a8ab52af-e9b9-4549-92d3-f6598226a888" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Based on 2018 “basic” Carnegie Classification; Carnegie Classification of Institutions of Higher Education, American Council on Education, accessed March 8, 2023.</span></span></span></a></span> This suggests that completion rates aren’t fated based on a school’s programs or student profile. The actions a school takes—how it engages and supports its students—can have a big influence on how many students graduate. Third, a number of schools have shown that large improvements over a ten-year period are possible: 141 bachelor’s-granting schools with at least 4,000 students have improved completion rates by at least ten percentage points in the past decade.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="0ef8faa1-e655-482d-864c-cd36c3ad1711"><sup class="FootNote_footnotesup__e73z_">13</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="0ef8faa1-e655-482d-864c-cd36c3ad1711" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Analysis based on IPEDS data.</span></span></span></a></span></p> <p>Expanding enrollment could become the next priority—particularly for lower-income students, since only 11 percent of available two- and four-year capacity is at institutions with above-average completion rates and Pell Grant–eligible student shares. Increasing enrollment by 2 to 3 percent a year while implementing measures to improve completion rates could create enough additional capacity to realize the “ten in 20” goal. </p> <p>The total cost of producing ten million additional graduates over 20 years would be roughly $1.2 trillion across all stakeholders. These costs could be reduced if higher education institutions increased affordability and decreased barriers to education, for example through online and hybrid programs and tuition installment plans. They can also be mitigated through academic offerings that lead to higher completion rates and higher-paying jobs. Higher education funders will need to collaborate to help finance this effort and ensure that potential students both graduate and find gainful employment. </p> <!-- --> <p>A McKinsey analysis of more than 100 interventions aimed at improving access and completion points to four broad barriers facing learners and the general measures needed to remedy them:</p> <ul> <li><strong>Affordability and financial resources.</strong> Make college more affordable, from strategically timed financial aid to low-cost “wraparound” services like childcare that make pursuing a degree possible.</li> <li><strong>Access to information.</strong> Provide better access to information about how to enroll, how to get financial aid, and what the possible outcomes of various programs can be.</li> <li><strong>Mindset and preparedness.</strong> Help students feel they’re up to the task through pre-enrollment programs and extracurricular experiences.</li> <li><strong>Support services and networks.</strong> Ensure that students have the support they need, from mentors to career and professional guidance.</li> </ul> <p>Higher education funders and institutions could take the following five decisive actions to address these barriers and achieve the ten in 20 goal:</p> <ul> <li>Prioritize the 52.5 million potential adult learners without college degrees through creative support structures, more-flexible class schedules, and tailored instructional modalities.</li> <li>Fill excess capacity in US universities, starting with the 1.65 million open seats in top-performing institutions with high completion rates.</li> <li>Deploy student-specific, data-driven interventions to improve access and close the 45-percentage-point gap in completion rates, supporting students from enrollment to employment.</li> <li>Guide students toward high-ROI, high-employment pathways through enrollment in the 64 percent of postsecondary programs that offer positive ROI within ten years.</li> <li>Explore options to improve college affordability through cost efficiency and new financing mechanisms.</li> </ul> <p>Graduating ten million more graduates in 20 years is in many ways an imperative for the future success and resilience of the country. The United States needs more graduates to fill skilled jobs; drive greater economic growth, mobility, and competitiveness; increase civic engagement; and improve health outcomes and national security. And hanging in the balance are individuals—ten million of them—on whom the future of the nation, and its promise, may well rest.</p></div><div class="container-placeholder"></div></div></div><div class="mdc-u-grid mdc-u-grid-gutter-xl"><section role="contentinfo" data-layer-region="article-about-authors" class="mdc-u-grid mdc-u-grid-col-md-12 AboutAuthor_mck-c-about-author__nRJzu"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_8032924 mdc-c-heading--title___5qyOB_8032924 mdc-c-heading--border___K8dj3_8032924 mdc-u-align-center"></h5><div data-component="mdc-c-description" class="mdc-c-description___SrnQP_8032924 mdc-u-ts-8 mck-u-links-inline mck-u-links-inline--secondary mdc-u-mt-5"><div><p><strong>Diana Gonzalez</strong> is an associate partner in McKinsey’s Washington, DC, office, where <strong><a href="/our-people/fiyinfolu-oladiran">Fiyinfolu Oladiran</a></strong> is a partner and <strong>Ted Rounsaville</strong> is a senior expert. <strong><a href="/our-people/jonathan-k-law">Jonathan Law</a></strong> is a senior partner in the Southern California office, <strong><a href="/our-people/saurabh-sanghvi">Saurabh Sanghvi</a></strong> is a partner in the Bay Area office, and <strong>Doug Scott</strong> is a senior expert in the Chicago office.</p> <p>The authors wish to thank Olivia Bewley, Kathryn Fox, Christian Gonzales, David Hobbet, Cynthia Liu, and Jane Ruan for their contributions to this report.</p></div></div></div></section><section class="mdc-u-grid mdc-u-grid-col-md-12 mck-u-screen-only"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-5 mdc-u-grid-col-lg-end-9"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_8032924 mdc-c-heading--title___5qyOB_8032924 mdc-c-heading--border___K8dj3_8032924 mdc-u-align-center">Explore a career with us</h5><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_8032924 mdc-c-link-container--align-center___ar3mu_8032924"><a data-component="mdc-c-link" href="/careers/search-jobs" class="mdc-c-button___U4iY2_8032924 mdc-c-button--secondary___Boipq_8032924 mdc-c-button--size-large___jwpUy_8032924" aria-label="Search Openings" data-layer-event-prefix="CTA Link" data-layer-action="click" data-layer-category="careers" data-layer-subcategory="search" data-layer-text="Search Openings"><span class="mdc-c-link__label___Pfqtd_8032924">Search Openings</span></a></div></div></section></div></main></div><div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="lightest-grey" data-module-category="StandalonePromo" class="RelatedArticle_mck-c-article-related__GGA76 mck-u-screen-only" data-layer-region="related-articles"><div class="mdc-o-container__wrapper is-wrapped mdc-u-spaced-mobile"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_8032924 mdc-c-heading--title___5qyOB_8032924 mdc-u-align-center">Related Articles</h5><div class="mdc-u-grid mdc-u-grid-col-md-3 RelatedArticle_items-container__s2uD0"><div class="mdc-u-grid mdc-u-grid-gutter-lg Card_card__diA2r Card_hover-effect__RGb9b"><div class="Card_wrapper-image__8b4P6"><a data-component="mdc-c-link" href="/industries/education/our-insights/transforming-hr-to-better-support-higher-education-institutions" class="mdc-c-link___lBbY1_8032924"><picture data-component="mdc-c-picture" class="Card_wrapper-image__8b4P6"><style>.picture-uniqueKey-trans-0 { aspect-ratio: 16/9 }</style><img alt="The manager is reading the resume and is interviewing the new employee. 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Enrollment growth is slowing, student debt is at an all-time high, the sector is not delivering on its promise of greater equity, and its reputation among many Americans is declining.[[footnote 1]] We believe there is a challenging but clear solution. Higher ed must remain focused on its core mission of educating learners but evolve its practices to serve more Americans. Our analysis suggests that the sector should aspire to a bold goal: graduate ten million more students than currently projected over the next 20 years. This goal is ambitious, but the data show there is a pathway to achieving it in a way that successfully addresses the sector\u0026rsquo;s challenges rather than exacerbating them.\u003c/p\u003e\n\n[[sidebar authors]]\n\n\u003cp\u003eBachelor\u0026rsquo;s degrees, associate\u0026rsquo;s degrees, and Title IV\u0026ndash;eligible certificates remain among the most proven enablers of economic mobility and individual empowerment in the United States.[[footnote 2]] Controlling for sociodemographic variables, graduates with bachelor\u0026rsquo;s degrees earn a median of $450,000 (for women) to $655,000 (for men) more over their lifetimes than those who have only a high school diploma, and studies show that this earnings premium is increasing.[[footnote 3]] Furthermore, a postsecondary degree has significant nonmonetary benefits, from better health outcomes to greater civic engagement.[[footnote 4]] For society, these benefits have compounding effects on the economy through GDP gains, increased tax payments, and reduced reliance on social services.[[footnote 5]]\u003c/p\u003e\n\n\u003cp\u003eThe benefits of a postsecondary degree are clear, but they are not distributed equally throughout society. Black and Hispanic Americans have the lowest rates of educational attainment, with only 21 percent of Hispanics and 28 percent of Black Americans having a bachelor\u0026rsquo;s degree or higher, compared with 42 percent of non-Hispanic Whites and 61 percent of Asian Americans.[[footnote 6]] Benefits are also distributed unequally across institutions; many schools, particularly those that serve a significant share of underrepresented and low-income students, fail to graduate large percentages of their student body every year, leaving millions in debt with no diploma to show for it.[[footnote 7]]\u003c/p\u003e\n\n\u003cp\u003eIn another troubling trend, enrollment rates have declined across the board in recent years, largely due to three factors: a drop in the US birth rate since the Great Recession, changing perceptions about the costs and benefits of earning a degree, and fallout from the COVID-19 pandemic.[[footnote 8]] Even as enrollment has fallen, however, demand for workers with degrees has risen. Our analysis indicates that 86 percent of new jobs projected to be created through 2030\u0026mdash;in fields such as nursing, teaching, and cybersecurity\u0026mdash;will likely require postsecondary education.[[footnote 9]] This talent shortage represents a significant risk to the nation\u0026rsquo;s public health, education, security, and global competitiveness. \u003c/p\u003e\n\n\u003cp\u003eFinally, as student loan debt has increased, so too has skepticism about the value of postsecondary education\u0026mdash;a shift that has been exacerbated by the pandemic. In May 2021, 65 percent of college students surveyed agreed with the statement that higher education is no longer worth the cost, up from 57 percent in December 2020 and 49 percent in August 2020.[[footnote 10]]\u003c/p\u003e\n\n\u003cp\u003eThese statistics raise a pressing question: how can the sector improve its value proposition and extend the benefits of higher education to more Americans while creating more-equitable economic mobility and a stronger economy? Two steps are necessary.\u003c/p\u003e\n\n\u003cp\u003eFirst, while there is capacity in the system, higher ed institutions must demonstrate that they can successfully graduate their students before expanding enrollment. It is especially important that schools demonstrate the ability to graduate the most vulnerable students. An analysis of enrollment and completion reveals that only 11 percent of the available capacity in the higher education sector is at schools that have both above-average completion rates and an above-average share of students eligible for federal Pell Grants for low-income students.\u003c/p\u003e\n\n\u003cp\u003eThe sectorwide average completion rates for bachelor\u0026rsquo;s and associate\u0026rsquo;s degrees\u0026mdash;64 and 34 percent, respectively\u0026mdash;make it difficult to justify expanding enrollment further.[[footnote 11]] However, an institution-by-institution view reveals a more nuanced story and demonstrates that there is real potential for significant systemwide improvement (exhibit).\u003c/p\u003e\n\n[[exhibit 1]]\n\n\u003cp\u003eFirst, completion rates vary widely by institution for both bachelor\u0026rsquo;s and associate\u0026rsquo;s degrees. Second, there are big differences between high- and low-performing schools when controlling for the type of institution and the share of Pell Grant\u0026ndash;eligible students. Even when adjusting for institution peer group by Carnegie Classification\u0026mdash;a framework for describing institutional diversity in US higher ed\u0026mdash;the average gap in completion rates between high- and low-performing two- and four-year institutions remains 30 percentage points.[[footnote 12]] This suggests that completion rates aren\u0026rsquo;t fated based on a school\u0026rsquo;s programs or student profile. The actions a school takes\u0026mdash;how it engages and supports its students\u0026mdash;can have a big influence on how many students graduate. Third, a number of schools have shown that large improvements over a ten-year period are possible: 141 bachelor\u0026rsquo;s-granting schools with at least 4,000 students have improved completion rates by at least ten percentage points in the past decade.[[footnote 13]]\u003c/p\u003e\n\n\u003cp\u003eExpanding enrollment could become the next priority\u0026mdash;particularly for lower-income students, since only 11 percent of available two- and four-year capacity is at institutions with above-average completion rates and Pell Grant\u0026ndash;eligible student shares. Increasing enrollment by 2 to 3 percent a year while implementing measures to improve completion rates could create enough additional capacity to realize the \u0026ldquo;ten in 20\u0026rdquo; goal. \u003c/p\u003e\n\n\u003cp\u003eThe total cost of producing ten million additional graduates over 20 years would be roughly $1.2 trillion across all stakeholders. These costs could be reduced if higher education institutions increased affordability and decreased barriers to education, for example through online and hybrid programs and tuition installment plans. They can also be mitigated through academic offerings that lead to higher completion rates and higher-paying jobs. Higher education funders will need to collaborate to help finance this effort and ensure that potential students both graduate and find gainful employment. \u003c/p\u003e\n\n[[MostPopularArticles 5]]\n\n\u003cp\u003eA McKinsey analysis of more than 100 interventions aimed at improving access and completion points to four broad barriers facing learners and the general measures needed to remedy them:\u003c/p\u003e\n\n\u003cul\u003e\n \u003cli\u003e\u003cstrong\u003eAffordability and financial resources.\u003c/strong\u003e Make college more affordable, from strategically timed financial aid to low-cost \u0026ldquo;wraparound\u0026rdquo; services like childcare that make pursuing a degree possible.\u003c/li\u003e\n \u003cli\u003e\u003cstrong\u003eAccess to information.\u003c/strong\u003e Provide better access to information about how to enroll, how to get financial aid, and what the possible outcomes of various programs can be.\u003c/li\u003e\n \u003cli\u003e\u003cstrong\u003eMindset and preparedness.\u003c/strong\u003e Help students feel they\u0026rsquo;re up to the task through pre-enrollment programs and extracurricular experiences.\u003c/li\u003e\n \u003cli\u003e\u003cstrong\u003eSupport services and networks.\u003c/strong\u003e Ensure that students have the support they need, from mentors to career and professional guidance.\u003c/li\u003e\n\u003c/ul\u003e\n\n\u003cp\u003eHigher education funders and institutions could take the following five decisive actions to address these barriers and achieve the ten in 20 goal:\u003c/p\u003e\n\n\u003cul\u003e\n \u003cli\u003ePrioritize the 52.5 million potential adult learners without college degrees through creative support structures, more-flexible class schedules, and tailored instructional modalities.\u003c/li\u003e\n \u003cli\u003eFill excess capacity in US universities, starting with the 1.65 million open seats in top-performing institutions with high completion rates.\u003c/li\u003e\n \u003cli\u003eDeploy student-specific, data-driven interventions to improve access and close the 45-percentage-point gap in completion rates, supporting students from enrollment to employment.\u003c/li\u003e\n \u003cli\u003eGuide students toward high-ROI, high-employment pathways through enrollment in the 64 percent of postsecondary programs that offer positive ROI within ten years.\u003c/li\u003e\n \u003cli\u003eExplore options to improve college affordability through cost efficiency and new financing mechanisms.\u003c/li\u003e\n\u003c/ul\u003e\n\n\u003cp\u003eGraduating ten million more graduates in 20 years is in many ways an imperative for the future success and resilience of the country. The United States needs more graduates to fill skilled jobs; drive greater economic growth, mobility, and competitiveness; increase civic engagement; and improve health outcomes and national security. And hanging in the balance are individuals\u0026mdash;ten million of them\u0026mdash;on whom the future of the nation, and its promise, may well rest.\u003c/p\u003e"},"isFullScreenInteractive":{"boolValue":false},"hideStickySocialShareBar":{"boolValue":false},"desktopID":{"value":""},"mobileID":{"value":""},"desktopURL":{"value":""},"mobileURL":{"value":""},"desktopPaddingPercentage":{"value":""},"mobilePaddingPercentage":{"value":""},"desktopOverrideHeight":{"value":""},"mobileOverrideHeight":{"value":""},"cerosOembedURL":{"value":""},"cerosRenderMode":{"targetItem":null},"cerosBackgroundColor":{"targetItem":null},"hideByLine":{"boolValue":true},"tableOfContentsTitle":{"value":"TABLE OF CONTENTS"},"accessStatus":{"targetItem":{"key":{"value":"RegisteredUsers"},"value":{"value":"Registered Users"}}},"articleType":{"targetItem":{"displayName":"Report"}},"hasSpecialReport":{"boolValue":true},"contentType":{"targetItem":{"displayName":"Article"}},"sourcePublication":{"targetItem":null},"externalPublication":{"value":""},"excludeFromClientLink":{"boolValue":false},"originalPublishDate":{"jsonValue":{"value":"2023-03-31T00:00:00Z"}},"footnotes":{"value":"\u003col\u003e\n \u003cli\u003eJon Marcus, \u0026ldquo;Colleges face reckoning as plummeting birthrate worsens enrollment declines,\u0026rdquo; \u003cem\u003eHechinger Report\u003c/em\u003e, May 22, 2021; Melanie Hanson, \u0026ldquo;Student loan debt statistics,\u0026rdquo; EducationData.org, February 10, 2023; Diana Ellsworth, Erin Harding, Jonathan Law, and Duwain Pinder, \u0026ldquo;\u003ca href=\"/industries/education/our-insights/racial-and-ethnic-equity-in-us-higher-education\"\u003eRacial and ethnic equity in US higher education\u003c/a\u003e,\u0026rdquo; McKinsey, July 18, 2022; Doug Lederman, \u0026ldquo;Despite positive experiences, students question value of college,\u0026rdquo; \u003cem\u003eInside Higher Ed\u003c/em\u003e, July 7, 2021.\u003c/li\u003e\n \u003cli\u003eJennifer Ma, Matea Pender, and Meredith Welch, \u003cem\u003eEducation pays 2019: The benefits for individuals and society,\u003c/em\u003e College Board, January 2020.\u003c/li\u003e\n \u003cli\u003e\u0026ldquo;Education and lifetime earnings,\u0026rdquo; US Social Security Administration, November 2015; ChangHwan Kim, Arthur Sakamoto, and Christopher Tamborini, \u0026ldquo;Education and lifetime earnings in the United States,\u0026rdquo; \u003cem\u003eDemography,\u003c/em\u003e August 2015, Volume 52, Number 4.\u003c/li\u003e\n \u003cli\u003e\u003cem\u003eEducation pays 2019,\u003c/em\u003e January 2020.\u003c/li\u003e\n \u003cli\u003eAnalysis based on data from College Board; The Institute for College Access \u0026amp; Success (TICAS); Integrated Postsecondary Education Data System (IPEDS), National Center for Education Statistics (NCES), US Department of Education; National Student Clearinghouse; US Census Bureau; and US Department of Education.\u003c/li\u003e\n \u003cli\u003e\u0026ldquo;Census Bureau releases new educational attainment data,\u0026rdquo; US Census Bureau, February 24, 2022.\u003c/li\u003e\n \u003cli\u003eAnalysis based on data from College Board, IPEDS, National Student Clearinghouse, NCES, TICAS, US Census Bureau, and US Department of Education.\u003c/li\u003e\n \u003cli\u003eJill Barshay, \u0026ldquo;College students predicted to fall by more than 15% after the year 2025,\u0026rdquo; \u003cem\u003eHechinger Report\u003c/em\u003e, September 10, 2018; Colleen Campbell, \u0026ldquo;Those left behind: Gaps in college attainment by race and geography,\u0026rdquo; Center for American Progress, June 27, 2019.\u003c/li\u003e\n \u003cli\u003eAnalysis based on data from Integrated Public Use Microdata Series (IPUMS), International Labour Organization, Moody\u0026rsquo;s Analytics, Occupational Information Network, OECD, Oxford Economics, US Bureau of Labor Statistics (BLS), US Census Bureau, US Census Bureau\u0026rsquo;s American Community Survey (ACS), and World Bank.\u003c/li\u003e\n \u003cli\u003eRachel Fishman et al., \u0026ldquo;One year later: COVID-19\u0026rsquo;s impact on current and future college students,\u0026rdquo; Third Way, June 29, 2021.\u003c/li\u003e\n \u003cli\u003e\u0026ldquo;Undergraduate retention and graduation rates,\u0026rdquo; NCES, May 2022.\u003c/li\u003e\n \u003cli\u003eBased on 2018 \u0026ldquo;basic\u0026rdquo; Carnegie Classification; Carnegie Classification of Institutions of Higher Education, American Council on Education, accessed March 8, 2023.\u003c/li\u003e\n \u003cli\u003eAnalysis based on IPEDS data.\u003c/li\u003e\n\u003c/ol\u003e"},"contributoryPractice":{"targetItems":[{"displayName":"Education"},{"displayName":"SHaPE"}]},"aboutTheAuthors":{"value":"\u003cp\u003e\u003cstrong\u003eDiana Gonzalez\u003c/strong\u003e is an associate partner in McKinsey\u0026rsquo;s Washington, DC, office, where \u003cstrong\u003e\u003ca href=\"/our-people/fiyinfolu-oladiran\"\u003eFiyinfolu Oladiran\u003c/a\u003e\u003c/strong\u003e is a partner and \u003cstrong\u003eTed Rounsaville\u003c/strong\u003e is a senior expert. \u003cstrong\u003e\u003ca href=\"/our-people/jonathan-k-law\"\u003eJonathan Law\u003c/a\u003e\u003c/strong\u003e is a senior partner in the Southern California office, \u003cstrong\u003e\u003ca href=\"/our-people/saurabh-sanghvi\"\u003eSaurabh Sanghvi\u003c/a\u003e\u003c/strong\u003e is a partner in the Bay Area office, and \u003cstrong\u003eDoug Scott\u003c/strong\u003e is a senior expert in the Chicago office.\u003c/p\u003e\n\n\u003cp\u003eThe authors wish to thank Olivia Bewley, Kathryn Fox, Christian Gonzales, David Hobbet, Cynthia Liu, and Jane Ruan for their contributions to this report.\u003c/p\u003e"},"authors":{"targetItems":[{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"285D129D64C24E65A72F542B2AE23B4E","name":"Diana Gonzalez","authorTitle":{"value":"Diana Gonzalez"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[]}},{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"4526D7E6C3834876AC9973EE0515F039","name":"Jonathan Law","authorTitle":{"value":"Jonathan Law"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[{"standardImage":{"src":"/~/media/mckinsey/our people/jonathan law/jonathan-law_profile_1536x1152.jpg","alt":"Jonathan Law"},"emailLinks":{"value":"Jonathan_Law@mckinsey.com"},"linkedInUrl":{"value":"https://www.linkedin.com/pub/jonathan-law/0/355/a56"},"description":{"value":"Supports education organizations and state, provincial, and local governments design and implement major initiatives that advance 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