State and federal governments, and their taxpayers, spent more than $9 billion on college students who dropped out before their second year and may never return, a nationwide report says.
A report by the American Institutes for Research in Washington, D.C, says $9 billion was spent on those students over a five-year period, with California, Texas and New York in the lead.
Mark Schneider, a vice president at the institute and former commissioner of the federal National Center for Education Statistics, said attrition, especially at public institutions, has far-reaching effects on the American economy.
"The bottom line of the report is that the country cares a lot about completion. But there's a very high number of students who drop out in the first year," Schneider told The News-Gazette. "You can't cross the finish line if you don't finish the first lap. That's a problem for everyone, not only for parents and for kids, but also for taxpayers."
In the report, "Finishing the First Lap: The Cost of First Year Student Attrition in America's Four Year Colleges and Universities," researchers looked at 2003 to 2008 data from the federal Integrated Postsecondary Education Data System.
They discovered that the 30 percent of first-year college students who failed to return to campus for a second year accounted for $6.2 billion in state appropriations for colleges and universities, more than $1.4 billion in student grants from states and $1.5 billion in federal government grants.
Schneider said the team did not study community colleges, where dropout rates can be even higher.
The report noted President Barack Obama's goal for the U.S. to have the highest percentage of college graduates in the world by 2020.
The report noted that students who attend public colleges or universities are subsidized by taxpayers through state appropriations and grants; nationwide, these subsidies average nearly $10,000 per student per year.
According to the report, 13 states posted more than $200 million of state funds lost to students dropping out before their second year of college.
The states include California, at $467 million; Texas, $441 million; New York, $403 million; and Illinois, $290 million.
The average state spent $120.5 million in state subsidies to first-year dropouts between 2003 and 2008, the report said.
The study did not look at the costs to taxpayers of students who drop out sometime after their sophomore year. Nationally, only about 60 percent of students graduate from four-year colleges and universities within six years.
Schneider said the problem begins before the college level.
"We need to get states on the case. States have legislative and budgetary authority, particularly in public institutions, where most students go," he said. "They need to start to factor in performance."
The report serves as the foundation for the group's new website, CollegeMeasures.org. Graduation rates and expenditures for all 50 states, six metropolitan areas and more than 1,500 institutions are at the site.