Is the Community College a Less Expensive Path Toward a Bachelor’s Degree?: Public 2- and 4-year Colleges’ Impact on Loan Debt

Policy makers and state representatives have claimed that, compared to the traditional path to a four-year degree, a course of study that begins in the 2-year sector provides a more affordable option. If this is true, then all else equal, 2-year students who obtained a 4-year degree would be expected to have acquired less student loan debt. To test these claims, this study examines the effect of initial enrollment in public 2- and 4-year institutions on education loan debt conditional upon bachelor’s degree completion. Two quasiexperimental techniques (Propensity Score Matching and Heckman Control Function) applied to official longitudinal loan data consistently revealed that similar 2- and 4-year students who obtained a bachelor’s degree had similar levels of debt and repayment. Among non-degree-completers, initial 4-year entrants had higher loan debt than 2-year students. These findings suggest that the 2-year path culminating in a 4-year degree is not less expensive in terms of loan debt. As such, initiatives that lead traditional 4-year students to the “cheaper” 2-year sector may crowd-out students who truly need to begin in these schools. In light of these results, studies analyzing the impact of the private and for-profit sectors should be conducted following the approach presented in this study.