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Davis, California

Monday, June 17, 2024

College dropouts cost taxpayers $9 billion

California leads the nation in spending millions on college dropouts.

American Institutes for Research (AIR), a not-for-profit, non-partisan organization, conducted a five-year study on the financial cost of students who drop out after their first year of college. From 2003 to 2008, $9 billion was lost nationwide due to first-year dropouts, $467 million of which was contributed by California.

“Every fall, first-year college students receive significant funding from colleges, states and the federal government. And every spring, hundreds of thousands of students decide not to return to college,” said Dr. Mark Schneider, AIR vice president, in a press release. “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.”

About 30 percent of first-year students fail to return to college for a second year. This accounts for $6.2 billion of state money given to colleges and universities and over $1.4 billion awarded in student grants. The federal government sustained a $1.5 billion loss in student grants as well.

A majority of students attend public universities or colleges, which are subsidized by taxpayers. Every year, taxpayers invest $10,000 per student nationwide. From 2003 to 2008, the cost of first-year dropouts increased by 15 percent. Additionally, states increased their spending on student aid grants by 30percent and the federal government by 40 percent.

“These costs can be heartbreaking for students and their families, but the financial costs to states are enormous,” Schneider said. “As state colleges and universities struggle in a difficult budget environment, what is most disturbing is how much direct state support has been lost to college dropouts.”

In 2009 to 2010, California spent over $10 billion in funding for colleges and universities. Despite the loss of money due to attrition rates, the 2010-2011 state budget proposal shows an increase of appropriations for higher learning to $11.8 billion, about 10.6 percent of the state’s entire budget.

This increase in state spending may be to offset the increasing cost of post-secondary education.

“Out of fiscal necessity, fees have increased substantially over the past two years, as they have in past economic recessions,” said Kevin Woolfork of the California Post-secondary Education Commission, in the state’s proposed budget report. “The Commission acknowledges the important role that state and institutional financial aid (along with federal aid) plays in keeping college affordable for needy Californians. The combined cost of fees and other costs of education (books and materials, housing, transportation, food, etc.) have made college less affordable to middle class and even some higher-income families.”

To aid students, the commission proposes to continue giving Cal Grant Competitive awards to those who meet needs and GPA requirements. Every year, about 135,000 students apply for 22,500 available awards. This program costs $45 million, which the budget proposal suggests should come from the $12 billion set aside for higher learning or from other resources.

Other sources of funding come from the colleges and universities themselves. The budget assumes that UC and CSU will have a combined $5 billion in fee revenues for 2010-2011, based on fee increases from last year. Student fees are estimated at $10,302 at UC and $4,429 at CSU.

“For UC, the proportion of public funding from fee revenue was 17 percent in 2001-2002 and 46 percent in the proposed 2010-2011 budget. For CSU, the proportion of funding from fee revenue increased from 16 percent to 40 percent. The share of revenues generated by student fees will increase as state budget shortfalls are projected to continue for years to come,” the report notes.

It is believed that a higher cost of learning is one of the main reasons for students to drop out of UC Davis.

“Students most frequently cite personal and financial reasons that affected their decision to leave: health-related problems (31 percent), change in financial status (31 percent), and decided to attend a different college (27 percent),” said Sabrina Sencil, Student Affairs Research and Information (SARI) Analyst, in the 2008-2009 exit survey report.

For the last several years, about 90 percent of first-year students return to UC Davis for a second year. In Fall 2009, about 8 percent of the 2008 incmoing class failed to return to campus.

Of those who did not enroll in 2009, 24 percent reported that the financial aid they received was inadequate, and 20 percent did not anticipate the overall cost of attending the university.

With finances playing a major role in the decision to stay in school, the state may have spend more on financial aid in order to spend less on dropouts.

“By default more than design, a greater share of the cost of a college education in California has shifted from direct public financing (state subsidies to institutions and grant aid to students) to students and their families,” the state budget report notes. “Very little planning has accompanied this shift and experts and policymakers are challenged to determine the effects of this cost shift on broader public goals for higher education.”

SARAHNI PECSON can be reached at city@theaggie.org.


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