College students who drop out before their sophomore year have cost taxpayers more than $9 billion during the past five years, according to a study by the American Institutes for Research (AIR).
The funds represent money spent on these students through state and federal financial aid packages used to pay for their freshman year.
In order to figure out how much money in state and federal subsidies was lost, AIR researchers analyzed five years of data from 2003 to 2008 from the federal Integrated Postsecondary Education Data System (IPEDS).
The AIR found that 30% of first-year college students who did not enroll for their second year accounted for $6.2 billion in state appropriations to these colleges and universities and more than $1.4 billion in student grants from the states. Additionally, the federal government provided $1.5 billion in grants to these students before they elected to drop out of school. These subsidies average nearly $10,000 per student per year.
“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,” Mark Schneider, an AIR vice president, said in a http://www.air.org/news/index.cfm?fa=viewContent&content_id=988 press release. “These costs can be heartbreaking for students and their families, but the financial costs to states are enormous.”
According to a 2002 report by the Census Bureau, high school graduates can expect to earn an average of $1.2 million in their lifetime while those with a bachelor's degree earn $2.1 million. Those who drop out of school during their second year fail to earn their degree, which puts them in a lower income bracket than those who do successfully complete college.