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INSIGHTS BLOG > The Costs of College Dropouts

The Costs of College Dropouts

Written on 11 October 2010

Ruth Fisher, PhD. by Ruth Fisher, PhD

A recent article in the AP, “Report: College dropouts cost taxpayers billions” by Eric Gorski, reveals the costs to taxpayers associated with students who attend college, but then drop out after the first year:

States appropriated almost $6.2 billion for four-year colleges and universities between 2003 and 2008 to help pay for the education of students who did not return for year two, a report released Monday says.  In addition, the federal government spent $1.5 billion and states spent $1.4 billion on grants for students who didn't start their sophomore years…

The actual cost to taxpayers may run two to three times higher given those factors and others, including the societal cost of income lost during dropouts' year in college…

[T]he findings also could give ammunition to critics who say too many students are attending four-year schools -- and that pushing them to finish wastes even more taxpayer money…

Sounds like a lot of wasted money, doesn’t it?  Before we can conclude the spending was unwarranted, we have to ask:  what are the countervailing benefits associated with sending “iffy” students to college?

One of my favorite things about America is that it’s the land of opportunity.  It provides people with opportunities they would never get anywhere else in the world.  In this case, the US system of colleges and universities provides individuals with the opportunity to earn a college degree, even if they cannot afford to pay for it themselves.

Yes, the cost of providing these opportunities includes the money spent on individuals who do not live up to the challenge.  The costs also include any contributions the unsuccessful students might have provided society, had they not attended a year of college.

However, the benefits include the value associated with students who do manage to successfully graduate, but who otherwise would not have been able to afford to attend.  Other benefits include any value the year of college provided to students who did not go on to finish a degree, such as any knowledge, insights, contacts, etc. they gained during their year in college.

So if we eliminate taxpayer funding to provide iffy students the opportunity to attend college, we save all that money we spend on students who drop out without a degree.  On the other hand, we also eliminate the opportunity of earning a college education for those students who would end up graduating, but who would not be able to attend without taxpayer assistance.

Before we can conclude that spending so much taxpayer money on individuals who do not end up graduating college is a waste of resources, we must add up all the other associated costs and benefits with providing such an opportunity.