by Stephen J.Handel

At the American Council on Education’s (ACE) annual conference earlier this year, President Ted Mitchell said that the threats to higher education were potent, but that our collective solution was obvious: improve student success. He went on to emphasize that all key elements of higher education—scholarship, research, community service, economic advancement—will become easier to accomplish if we can help more students earn meaningful postsecondary credentials that allow them an opportunity to support themselves and their families.

Ted’s right. College completion— and the reasons why credential completion is elusive for so many students—is one of the most important challenges facing higher education. Most Democrats, independents, and Republicans agree. According to data compiled by the centrist think tank Third Way, 78 percent of voters believe that colleges have a responsibility to ensure that most students who enroll graduate. That view is held by 83 percent of Democrats, 75 percent of Independents, and 72 percent of Republicans.

Nationally, the average six-year graduation rate is only 62 percent. The average is lower for students from underserved communities. In addition, many individuals who start college never finish. According to the National Student Clearinghouse, nearly 37 million individuals in the United States have attended college but left without earning a degree. That’s greater than the population of California.

At ECMC Foundation, our goal is to eliminate gaps in college completion for all students, especially those farthest from opportunity. We work with partners across America to support innovative and scalable projects that help postsecondary institutions—and the students who attend them—do a better job of helping students earn a degree.

To accomplish this, one of the Foundation’s strategies is to create effective incentives for colleges and universities to boost completion rates for their undergraduate students. Of course, all institutions have a mission to help students earn degrees and credentials, but sometimes those good intentions are diverted to address other important goals, such as research, faculty scholarship, or community service—all important and worthy aims. However, if the majority of the populace—and their lawmakers—believe that student credential completion is first among equals, as Ted notes, we ought to think seriously about an incentive structure that accommodates that goal more effectively.

One of ECMC Foundation’s biggest bets in supporting a renewed higher education incentive structure has been its support ACE’s effort to revise the Carnegie Classification of Institutions of Higher Education in partnership with the Carnegie Foundation for the Advancement of Teaching. ACE’s aim is not simply to update what is a familiar feature of American higher education but to restructure it in ways that improve outcomes for students by changing the incentives under which institutions are recognized and rewarded.

ACE’s five year effort hit a key milestone in April 2025 when it launched a new classification scheme that recognizes student success as a central aim of every college and university.

The Carnegie Classification is the preeminent framework for classifying colleges and universities in the United States. Developed in the early 1970s to support research and policy analysis, the classification system has become the national standard for grouping colleges and universities mostly around the kinds of awards and degrees they offer, from certificates to Ph.Ds. This approach has catalyzed institutional and systems-level change, mainly by driving increased research activities. For example, federal research funding to universities has increased more than four-fold since the birth of the Carnegie Classifications; and the number of doctoral degrees awarded per year has tripled.

The Carnegie Classification’s success, however, has also engendered the unintended outcome of incentivizing colleges and universities to intensify research operations as a singular moniker of institutional prestige. Some institutions—including those that serve large numbers of underrepresented students—have redirected resources to achieve research aims when those resources might be better directed toward student learning outcomes. While research is a critical endeavor, the needs of a 21st Century economy and culture have additional aims, such as graduating more students from underserved groups with degrees and credentials that allow them to engage fully in American life.

ECMC Foundation’s support of ACE’s five-year initiative began in 2022 (along with the contributions of as many nine additional philanthropic funders totaling over $17 million) and continues to this day. During this time, ACE has redesigned the system from an institution- and degree-centric approach to one that focuses greater attention on undergraduate students. In the same way that the earlier classification scheme incentivized institutions to pursue research (supporting, say, institutions to advance from an R2 classification to an R1), the new framework:

1. highlights the extent to which institutions provide access to students from lower socioeconomic and historically underrepresented racial/ethnic backgrounds; and
2. identifies the degree to which the institution’s students go on to earn competitive wages in the context of their geographic location.

This new classification is called the “Student Access and Earnings Classification.” It groups almost 4,000 institutions along a variety of dimensions, such as student enrollment and degree offerings (a feature of the former system), but also how well a given institution provides postsecondary access to individuals in their region and how successful their students are after they leave the institution. Just a causal review of the data reveals some intriguing insights:

• At the extremes, colleges and universities that offer significant access to their institutions as well as higher post-graduate salaries far outnumber institutions that offer limited access and low salaries (202 vs. 10).
• Among all colleges and universities, the number of institutions that offer high earnings (regardless of access) outnumber institutions that provide low earnings (453 vs. 51).
• Community colleges and regional four-year colleges and universities—institutions that educate the vast majority of students in the US—also figure prominently in the new classifications A unsophisticated glance of the data suggest that a great many provide high access to college and at least medium earnings.

Current outcomes aside, the goal of this system is not to create a static, one-time classification of current colleges and universities. The goal is to create a dynamic scheme that serves as a prod for institutional improvement (and the current groupings also show that there is plenty of room for that too).

The Classifications web site is easy to use and understand, which was another goal of this project. The core idea is to group colleges and universities in appropriate and understandable ways. When college leaders see their institutions categorized publicly in relation to their peer institutions (other schools very much like themselves in terms of access, resources, programs, and degrees), it is hoped they will galvanize their campus community to improve their position by serving their students more effectively.

ACE’s effort is to improve higher education in one transformative swoop represents only one ECMC Foundation grant that exemplifies our focus on strategically responsive investments. As we support postsecondary transformation to close gaps in college completion, our initiatives, strategically focused grants, and program-related investments will continue to provide a balanced set of strategic levers to better serve students in U.S. colleges and universities.