Study shows college drop outs cost nation millions

Dropping out of college poses personal problems for students, as well as financial woes for the country.

Dropping out of college is expensive for individuals, taxpayers and universities, but the cost the nation pays for dropouts is also an issue.

MU Vice Provost for Enrollment Management Ann Korschgen said about 15 percent of freshmen that start at MU do not return for their sophomore year and about 30 percent of students fail to complete their bachelor’s degree within six years of starting at MU.

Dropouts themselves lose the money they put into tuition and loans and will make a half a million dollars less in a lifetime than people who earned their bachelor’s degrees, according to a recent study titled “The High Cost of Low Graduation Rates” by Mark Schneider and Lu (Michelle) Yin.

The study found that the state and nation also lose money when students drop out of school. Students who started their bachelor’s degree in 2002 and did not graduate six years later cost the nation annually about $3.8 billion in lost income, $566 million in lost federal income taxes and $164 million in lost state income taxes.

“I concentrated on the dollar figures because I think that’s what a lot of people care about right now,” Schneider said. “People want jobs. People want economic growth, so I think focusing on dollars gets the attention of state legislators and governors. Society as a whole should be concerned about the other kinds of benefits that come out of higher education.”

According to the study, Missouri students who entered bachelor’s programs in 2002 and failed to complete their schooling cost $24,609,000 in lost income, $3,691,000 in lost federal income taxes and $1,230,000 in lost state income taxes each year.

Over their lifetimes, this one class of Missouri dropouts will cost $2,989,723,000 of lost income, $608,879,000 of lost federal income taxes and $179,383,000 in lost state income.

Schneider said the United States needs the skills of graduates to do things that will build our economy and our country.

“We need the human capital that students accumulate when they’re in college in order to invent things, in order to run companies, build companies,” Schneider said. “I think that’s fundamentally important.”

MU’s office of the Vice Provost for Undergraduate Studies conducted a study of students who dropped out after the fall 2010 semester last year. The study found that the number one reason students dropped out was because of financial reasons, but family issues including parental support or being too far away from home were also factors.

“There are multiple reasons why people leave, which I thought was sort of the first interesting finding,” said Stephen Whitney, professor and originator of the study.

Students who dropped after the spring 2011 semester were also surveyed along with class of 2011 graduates. Whitney said the findings of the study will be a useful tool for improving retention rates in the future.

“We’re going to use that information to help strengthen our student support here on campus,” Whitney said. “The idea is to make sure that we as an institution are doing everything we can so that every student no matter what background, what race, what gender, what religion or whether they’re first generation or not or whether they’re rural or urban have the same opportunity and same ability to succeed here at MU.”

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