Early college dropouts cost taxpayers millions

Early college dropouts cost taxpayers millions

November 7th, 2010 in News

Taxpayers in Tennessee and Georgia are spending more than $100 million a year supporting college students who drop out in their freshman year, according to a new study of state and federal funding of four-year colleges.

The American Institutes for Research found that more than $550 million of taxpayer funds were spent between 2003 and 2008 on freshmen in Tennessee and Georgia who didn't return in their sophomore year. Nationwide, nearly $9 billion was spent on the 30 percent of freshmen at four-year colleges who didn't make it past their first year.


State and federal governments spent nearly $9 billion from 2003-08 to support students at four-year colleges who dropped out after their first year.


* $157 million in state appropriations

* $64.2 million in state student grants

* $33.5 million in federal student grants

* Total: $254.7 million


* $168 million in state appropriations

* $86 million in state student grants

* $40.8 million in federal student grants

* Total: $294.8 million

Source: American Institutes for Research study, "Finishing the First Lap: The Cost of First-Year Student Attrition for America's Four-Year Colleges."


* 30: Percentage of students entering four-year degree programs who don't make it to a second year in college.

* 32: Percentage of UTC students who return for a second year. The 68 percent retention rate is up 8 percentage points from two years ago.

* 60: Percentage of students who graduate within six years from the University of Tennessee.

* 42: Percentage of students who graduate within six years at the University of Tennessee at Chattanooga.

Source: University of Tennessee, Tennessee Higher Education Commission, American Institutes for Research

PDF: Study on costs of college dropouts

"When students enroll in a college or university and drop out before the second year, they have invested time and money only to see their hopes and dreams of a college degree dashed," said Mark Schneider, a former commissioner of the National Center for Education Statistics who wrote the study. "These costs can be heartbreaking for students and their families, but the financial costs to states are enormous."

Georgia ranked ninth and Tennessee was 12th among the 50 states in the amount of money spent on college dropouts, Schneider said. California spent the most money -- $490.8 million -- while Alaska spent only $1.7 million in the time period.

Tennessee is among a handful of states trying to boost college retention and graduation by paying public colleges not just for enrollment but also for the number of graduations.

State Sen. Andy Berke, D-Chattanooga, a member of the Senate Education Committee, said the funding formula adopted by the Legislature this year puts Tennessee at the forefront of the growing effort.

"We've had a lot of focus on access to colleges over the past several decades and we need to continue to work toward that," Berke said. "But we also need to improve our completion and graduation rates."

At the University of Tennessee at Chattanooga, only 42 percent of students graduate within six years.

But UTC officials say they are working to improve retention with new attendance programs and counseling assistance for freshmen.

"The data is very clear that students who go to class consistently are far more likely to graduate, to persist in their program and graduate on time," UTC Provost Phil Oldham said. "We don't penalize or harass students for not going to class, but we have added programs to reach out to students if they miss more than one class to better identify their problems and needs as early as possible."

In addition to the new Freshman Academic Success Tracking program, UTC added more freshman counseling assistance, especially for those without a defined major, through its new Center for Advisement and Student Success. The university also offers classes that help orient students to college life and academic opportunities.

Tiffany Pryor, a UTC sophomore who is a pre-nursing and psychology student hoping to graduate in 2014, said a course offered on college mindsets helped her focus on staying at UTC.

"I'm able to take the strategies I've learned in the mindset class and apply them to my studies," she said. "Now I'm achieving greatness and my grades couldn't be better."

Warren Neel, a former business school dean at the University of Tennessee who now heads UT's Corporate Governance Center, insists colleges in Tennessee still must do better in helping students to graduate.

In a new book called "The Accidental Dean," Neel said a college diploma is becoming increasingly important in a global economy.

"There are a whole host of reasons why students drop out, but our colleges and universities need to do more to focus on student needs and boost their graduation rates," he said.

Oldham and other officials say the six-year graduation standard doesn't capture students who transfer to other schools or come back later and ultimately graduate.

"There are rewards for going to college even if you don't graduate," Oldham said. "But the fact of the matter is that when people go to college and they don't get the degree they were seeking it's hard on everybody -- the student, the family and the taxpayer."