gap year

New York Fed researchers wrong about gap years

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Aug 13, 2020

As unprecedented numbers of students signal that they will take a gap year—up to 40%, according to a survey by SimpsonScarborough—and a whopping 20% of Harvard’s first-year students are deferring admission, the question of whether taking a gap year has never been more relevant in the US.

In a recent brief for Liberty Street Economics, a publication of the Federal Reserve Bank of New York, two of the Fed’s researchers argued that delaying college during the pandemic could be costly.

But by ignoring the fact that many who start college don’t graduate within six years—or at all—their conclusions are faulty. In normal times, many more students would benefit from taking a gap year. With the current turmoil on college campuses, that number may be even higher now.

In making their recommendations, the Fed’s researchers struck out on three assumptions.

First, the researchers stated that the opportunity cost of going to college is low right now because it’s hard to find a job. That is correct—but only if one assumes that a full-time job is what one should be doing on a gap year, or what I’ve come to think of as a discovery year or year of purpose.

During a year of discovery for 18- to 22-year olds, individuals shouldn’t be seeking full-time employment, but ought to embark on a series of experiences in which they learn about themselves—what they like and do not like, their strengths, their purpose, and what pathways are possible. They should partake in active experiences, such as last-mile training programs, internships and externships, apprenticeships, paid work (yes, they should have some), experiential-learning opportunities, short courses or community service. At each juncture they should reflect to clarify what they do not like and start to figure out what they do. 

For those taking gap time with an eye toward the workforce in this COVID-19 era, Parachute Bridge, for example, offers a new program, Career Launcher, to help students become “the most employable version of themselves.” Programs like Parachute Bridge’s 3-week virtual career prep may become even more necessary as students grapple with the challenges of workforce onboarding after college.

Similar programs, like Boost by Kaplan, make these options affordable and accessible to a large slice of the population.

Second, the researchers at the Fed stake their claims on the idea that colleges are cutting tuition right now, which implies that now is a good time to go to college. But that’s not universally true. Far from it. Facing budgets that have been wrecked by the recession and pandemic, many schools are in no position to cut tuition and fees.

Third, in their calculations, the researchers ignore some underlying realities.

Over 40% of first-time, full-time students who started college in the fall of 2012 failed to graduate from four-year programs within six years, according to the National Student Clearinghouse Research Center. Students who are in the top income quartile are more likely to graduate—the rate is 62%, but the graduation rate for individuals in the bottom income quartile is a catastrophic 13%.

Non-completers not only lose out on the benefits of a college degree, but also face increased debt without a big bump in earnings. They unsurprisingly have a three-fold higher risk of default than completers, according to the Center for American Progress.

But the researchers at the NY Fed only consider that students will graduate on-time in their calculations and fail to consider this very likely counter-factual.

Of course, that raises the question—why the high dropout rate? There are many reasons, but one set of reasons that suggests a gap year could help increase the graduation rate is relevant here.

In researching our book Choosing College, we learned that a significant number of students from all backgrounds enroll in college to do what’s expected of them or to get away from a bad circumstance in their lives. In other words, they are motivated by external factors, not internal goals. They choose college because it is a socially acceptable answer to what they are doing next.

Students who attend college for extrinsic reasons suffer poor outcomes. According to our research, students who enrolled in college because they felt it was expected of them ended up dropping out or transferring 74% of the time. Of those who went to college “to get away,” over half had left the school they were attending without a degree at the time we talked to them.

In a world of high college tuition and tees, that’s unacceptable, even if the opportunity cost is low. Too many students go to college not knowing what they want to get out of it or how to make it work for them. Committing to a four-, or even two-, year school and taking on lots of debt when they lack passion and focus for the endeavor is risky—and expensive.

And here’s where the gap year, which research shows is beneficial when you control for demographics grades, test scores and the like, factors in.

If students take a gap year where they have a clear plan in place that is time-bound—meaning at the end of the year or two they will apply to receive more formal education—they can build passion and purpose and create a deeper intrinsic sense for why they should go to college and how it will help them. By enrolling with that sense of purpose, our research showed that they have a much greater likelihood of graduating.

Of course, what would be even better is if colleges started to rethink their first-year experience as one of discovery that counted for credit. Schools ought to take the lead in finding partners and offer financial aid as well as credit for the experiences and demonstrated learning that students accumulate. This is in their interests because it can help students come to college with greater clarity and purpose and thus be more likely to graduate.

Degree of Freedom, a new college that recently purchased Marlboro College campus in Vermont, appears to be applying this type of thinking, as it will offer dedicated apprenticeships in which students can learn about themselves and different career trajectories so they can build purpose and passion—and not “waste time pursuing majors or courses that will lead them to a job they wouldn’t enjoy.”

Champlain College is offering a “Virtual Gap Program,” a semester-long “journey into academic college life, holistic well-being, and finding meaning through virtual internship and service experiences.” And Boise State is offering a “Bronco Gap Year” with the opportunity to explore one’s passions while taking classes from Coursera that will count for credit.

The ultimate point is not that all students should take a gap year. It’s that the Fed researchers imply wrongly that many shouldn’t take such a year based on faulty assumptions.

Michael is a co-founder and distinguished fellow at the Clayton Christensen Institute. He currently serves as Chairman of the Clayton Christensen Institute and works as a senior strategist at Guild Education.