Are two‐ or four‐year colleges more efficient at increasing the educational attainment of young adults? I use state variation in two‐ and four‐year college systems to address this question at the state level. I find that the composition and cost of higher education in a state affect the enrollment decisions of individuals in that state. Further, attending a two‐year rather than a four‐year college may lower the educational attainment of some students, but more students will benefit from the community college alternative. It also most likely costs the state more to educate a student in a four‐year rather than a two‐year college. As a result, community colleges provide a potentially efficient way to increase access to higher education as well as increase the overall educational attainment of a state's residents.