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Department of Education data suggest college dropouts cost taxpayers billions

Monday, October 11, 2010 | 12:32 p.m. CDT; updated 6:03 p.m. CDT, Monday, October 11, 2010

Dropping out of college after a year can mean lost time, burdensome debt and an uncertain future for students.

Now there's an estimate of what it costs taxpayers. And it runs in the billions.

States appropriated almost $6.2 billion for four-year colleges and universities between 2003 and 2008 to help pay for the education of students who did not return for year two, a report released Monday says.

In addition, the federal government spent $1.5 billion and states spent $1.4 billion on grants for students who didn't start their sophomore years, according to "Finishing the First Lap: The Cost of First-Year Student Attrition in America's Four-Year Colleges and Universities."

The dollar figures, based on government data and gathered by the nonprofit American Institutes for Research, are meant to put an economic exclamation point on the argument that college completion rates need improvement.

But the findings also could give ammunition to critics who say too many students are attending four-year schools — and that pushing them to finish wastes even more taxpayer money.

The Obama administration, private foundations and others are driving a shift from focusing mostly on making college more accessible to getting more students through with a diploma or certificate.

Mark Schneider, a vice president at the American Institutes for Research and former commissioner of the Education Department's National Center for Education Statistics, said the report's goal is to spotlight the costs of losing students after year one, the most common exit door in college.

"We're all about college completion right now, and I agree 100 percent with the college completion agenda and we need a better-educated adult population and workforce," Schneider said.

The cost of educating students who drop out after one year accounts for 2 to 8 percent of states' total higher education appropriations, Schneider said. He said the report emphasizes state spending because states provide most higher education money and hold the most regulatory sway over institutions and can drive change.

Ohio, for example, has moved toward using course and degree completion rates in determining how much money goes to its public colleges and universities instead of solely using enrollment figures.

"We recognize an institution is not going to be perfect on graduation and completion rates," said Eric Fingerhut, chancellor of the Ohio Board of Regents. "But at the same time, we know they can do better than they're doing. And if you place the financial rewards around completion, then you will motivate that."

The AIR report draws from Department of Education data, which Schneider concedes does not provide a full picture.

The figures track whether new full-time students at 1,521 public and private colleges and universities return for year two at the same institution. It doesn't include part-timers, transfers or students who come back later and graduate.

The actual cost to taxpayers may run two to three times higher given those factors and others, including the societal cost of income lost during dropouts' year in college, said Richard Vedder, an Ohio University economics professor. And tying state appropriations to student performance could just cause colleges to lower their standards, he said.

Robert Lerman, an American University economics professor who, like Vedder, questions promoting college for all, said the report fleshes out the reality of high dropout rates. But he said it could just as easily be used to argue that less-prepared, less-motivated students are better off not going to college.

"Getting them to go a second year might waste even more money," Lerman said. "Who knows?"


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Comments

Ellis Smith October 11, 2010 | 4:59 p.m.

This became an issue several years ago at some public technical institutes. Graduation rates in engineering had historically been low, and that situation was accepted as normal, but the issue of what this was doing to students (and to costs) became impossible to ignore.

One solution has been to spend more one-on-one time with freshman students to determine why a student has a problem. Is the student not qualified, or are there issues like adjusting to college or lack of proper study habits and time management? Are there outside factors, such as something having to do with the student's family?

There has been some success at retention and in graduation rates, but this approach requires both time and expense. It tends to work where the number of students is relatively low. For example, Colorado School of Mines has less than 4,000 students in total, only part of them being freshman. Missouri University of Science & Technology has 7,000 students, only part of them freshmen.

Maybe it comes down to how you feel about your students. If they really are as wonderful as you say, can't you justify such a program?

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