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ESG Newsletter published on July 11, 2019

New Framework Puts Community Colleges to the Test

Recently, Breckinridge updated our higher education framework covering four-year colleges and universities to enhance our analysis of emerging trends in the sector, including evolving student demographics and an increasing focus on education access and affordability. We are now applying similar themes to our revised community college framework.

As discussed in Higher Ed and New Student Demographics, the demographic profile of students across the United States is shifting. At the same time, students and parents are beginning to question the value proposition of a four-year college degree. Community colleges can be a solution to both issues. In many cases, they can be an affordable alternative to traditional four-year institutions and are often better attuned to the interests of local stakeholders. With increasing demand for certain skilled professions such as nurses1,2, teachers3,4, STEM5, etc., community colleges can tailor curriculum offerings to provide students with skills that align with the needs of local employers. This results in mutually beneficial outcomes for students, businesses and the local community.


Our community college framework is designed to help us understand how well community colleges are fostering positive student outcomes while adapting to the changing landscape of the higher education sector. To this end, we look at student success and mobility rates, as well as the breadth of social support programs including child-care services, flexible scheduling, online programs and advisor support. We believe community colleges that excel in these areas are likely to have better success attracting and retaining students, which is supportive to credit quality.

We also take into consideration the extent to which a community college is providing access to education opportunities for local under-represented groups. Unlike four-year institutions, which often draw students from a broader geographic pool, community colleges tend to attract students staying close to home. Accordingly, we believe that community colleges with student bodies that are fully representative of the communities that the colleges serve can maximize opportunities for collaboration with a wide variety of local stakeholders.

At Breckinridge, the integration of ESG research into our bottom-up fundamental analysis helps us identify issuers who will be more resilient to longer-term, extra-financial challenges. Within our community college framework, we aim to identify those community colleges that are best aligned with the needs of their respective communities, hence solidifying local support for their bonds and bolstering the local economy through the creation of a skilled workforce.


[1] Anthony P. Carnevale, Nicole Smith, Artem Gulish. “Nursing Supply and Demand Through 2020.” (2015) Center on Education and the Workforce.

[2] American Association of Colleges of Nursing. “Nursing Shortage” April 2019.

[3] Sarah Betancourt. The Guardian. “Teacher shortages worsening in majority of US states, study reveals” September 6, 2018.

[4] Bureau of Labor Statistics. Occupational Outlook Handbook: High School Teachers. (2019)

[5] National Science Foundation. STEM Education Data and Trends. (2014).

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