Effects of Student Retention and Graduation on Cost Disease

           A major contributor to both higher costs for institutions, students, and taxpayers and lower productivity is the relative low graduation rates of degree-seeking students.  A study by the American Institutes of Research (AIR) estimated the costs f full-time degree-seeking students who began college in the fall of 2002 (Schneider & Yin, 2011).  Those who did not complete a degree within six years cost an estimated  $3.8 billion in income to themselves, $566 million in lost federal income taxes, and $164 in lost state income taxes (Schneider & Yin, 2011).  These estimates were made based on US Census Bureau data that show that graduates between the ages of 25 and 34 earn about 40 % more than their non-graduate counterparts (Schneider & Yin, 2011).  Although the AIR’s estimates excluded the effects of part time student dropouts and the successful graduation of transfer students, the effect of dropping out is still evident, lost revenue.  This study also does not account for the wasted spending, in tax dollars, by federal, state, and local governments in subsidizing the educations of those students who do not complete their degrees.

            However, another study conducted by the AIR estimates the wasted government spending on community college dropouts.  The study estimates the amount of money spent on first year community college students who do not return for a second  year over the 2004/2005 to 2008/2009 academic years.  They find that $3.85 billion in federal, state, and local appropriations and grants was spent over this time period (CollegeMeasures.org, 2011).

            These data show evidence that institutions, students, and taxpayers are wasting both money and time on students who do not complete their degrees.  To what extent these dropouts effect the greater economy is arguable, and needs more compelling evidence, but these studies provide evidence that time and money are spent to help students earn a degree that they do not complete.  A possible solution for this problem is to delay acceptance into an institution by a year so that students could prepare for the challenges that lay ahead.  Some people view college as a time period to postpone an adult life style or an attempt to “figure things out.”  Higher education should not be viewed as a “time out” period. but as a means to achieve one’s professional goals.  In actuality, the demands of balancing education, work, and family provide more conflicts and dilemmas.  Universities and colleges could accept students and provide an orientation a year in advance as an attempt to allow the student to consider lifestyles changes.  This time period would allow for reflection and rededication of their educational and professional goals. 

CollegeMeasures.org website. (2011). Community college dropouts cost taxpayers nearly $4 billion. Retrieved from http://collegemeasures.org/post/2011/10/Community-College-Dropouts-Cost-Taxpayers-Nearly-244-Billion.aspx

Schnedier & Lin. (2011). The high cost of low graduation rates: How much does dropping out of college rally cost? Retrieved from http://www.air.org/files/AIR_High_Cost_of_Low_Graduation_Aug2011.pdf