Is It Really Cheaper to Start at a Community College? The Consequences of Inefficient Transfer for Community College Students Seeking Bachelor’s Degrees

For many students who intend to complete a bachelor’s degree, the savings from starting their undergraduate education at a community college is a major factor in their college choice. Yet, given inefficiencies in pathways through college and in the credit transfer process, initially attending a two-year college may be a false economy. This paper investigates whether it is more efficient for students to start at a two-year or four-year college if their intent is to complete a bachelor’s degree. The authors use data from two state systems, including term-by-term course-level information with matching student demographics and degree records on entering cohorts of students at each state’s public two- and four-year institutions. They combine these data with cost and tuition data to estimate the relative efficiency of starting at a two-year versus a four-year college. Results suggest that the optimal choice about where to start varies across a number of dimensions. Low rates of credit transfer are important, but the most salient factor is the diversionary effect of two-year colleges on ever transferring to a four-year college. Sensitivity testing and break-even analyses illustrate how findings vary across student pathways.