California spent nearly half a billion on college freshmen who later dropped out, study finds

At a time when California’s public colleges are battling to maintain state funding, a report says that over a five-year period, the state spent nearly half a billion dollars to educate first-year college students who dropped out before their sophomore year.

The report found that California ranked first in the nation in the amount of taxpayer funds — $467 million — spent on students at four-year colleges who failed to return for a second year. Texas, with $441 million, and New York, with $403 million, ranked second and third.

The study, prepared by the Washington-based American Institutes for Research, analyzed federal data on retention rates at hundreds of four-year colleges and universities and states’ education funding between 2003 and 2008.

Nationally, about 30% of first-year students do not return for a second year. At California public colleges, the dropout rate is about half that.


Overall, states sent $6.2 billion in general funds and $1.4 billion in grants to colleges and universities for first-year students who did not return, according to the study. The federal government issued an additional $1.5 billion in grants to those students.

The federal data do not track students who complete their studies at other institutions, said study author Mark Schneider. But other federal measures indicate that most dropouts do not return.

“There are taxpayer dollars, large amounts of money going out the door to students who are not coming back the next year,” Schneider said in an interview. “In the K-12 world, we are saying schools are responsible for the success of students. In higher education, we haven’t done that yet and we need to.”

At California public colleges, first-year dropouts accounted for about $466 million in state funding in the five years studied. Federal grants to those students totaled almost $61 million.

California Supt. of Public Instruction Jack O’Connell agreed that colleges and universities could operate more efficiently in moving students toward graduation. But he said state-imposed budget cuts that have slashed classes, increased student fees and reduced staff are more of a hindrance.

“My impression is that we need to make a greater investment in higher education” he said. “Too many students are being forced to take on a second or third job. The lack of adequate college funding has led to fewer classes being offered, which extends the number of years it takes to finish.”

But O’Connell said the study raised important policy issues.

“The fact that we have these numbers helps with accountability and transparency,” he said. “We should do exit interviews with students and learn why they leave education.”