The Economics of Student Retention

Student retention is an ongoing issue despite the efforts made by universities to increase retention rates. At a Faculty Senate meeting yesterday one of my fellow Senators proposed that incoming freshmen receive a healthy dose of counseling on financial matters, along with the standard fare of advice on academics.

With that excellent suggestion fresh in my mind, I eagerly took a look at a new report, College Dropouts Who Borrowed for Education Face Long-Term Economic Hardship. Here's part of what I learned:

Known risk factors for dropping out appear to be more important than
borrowing in affecting a student’s chances for degree completion. Among the known risk factors for dropping out are delaying entry into postsecondary education after high school, attending college part-time, and working full-time while enrolled.

The problem with the conclusion as stated in the excerpt is that the risk factors mentioned are not independent of each other. Adverse economic circumstances correlate with all the behaviors that are associated with dropping out. In other words, there be no magic bullet that will solve the problem.

Another aspect of dropping out, not discussed in the report, relates to how effectively student loan programs are administered. Some colleges and universities do a better job than others in getting the money into the hands of students without unnecessary bureaucratic delays. Delays can result in the inability to buy textbooks, for example. That doesn't help retention.

Another relevant factor, in my estimation, is the large tuition increases of recent years. Students who borrow face a mountain of debt after graduation. Since tuition increases have far outstripped the starting salaries of college graduates, the real burden of that mountain has been rising significantly. Not every student likes the thought of climbing that mountain.

As a professional educator and teaching and learning specialist, I recognize the value of good teaching in keeping students around. Universities at least pay lip service to better teaching. Some actually make real efforts to improve it. The financial side of retention needs to be better understood for administrators to allocate resources effectively. The report suggests that private scholarships and other community support can be a significant part of the effort. Unfortunately, it isn't likely that significantly more private scholarship money will be forthcoming. That takes me back to the first paragraph and my colleagues suggestion that financial counseling be an integral part of the first year experience. Knowing how to wisely spend money can be as useful a skill as knowing how to make it.