College Dropout Rate

Have you ever wondered how many American college students remain in college?  What options are out there for students who don’t complete college, and why are they dropping out?

Highlights

  • Around 23 percent of college students drop out by their fourth year.
  • 40 percent of college dropouts have parents who didn’t finish college.
  • Nearly one-third of American Indians/Alaska natives dropped out after two years in a 2014 study.
  • Students with the highest student loans are less likely to drop out than those without loans or with smaller loans.
  • Students aged 19 or under are the age group least likely to drop out of college.

American students have long been encouraged to finish high school and immediately enroll in college. For many, it’s considered a rite of passage- the way to competitively enter the job market and begin a career. In spite of the importance of a college education in the United States, the rates of completion for college students are low- especially for those attending for-profit schools and community colleges. Nearly a third of students who enroll never actually go on to earn a degree. In 2019, fewer than half of Americans between the age of 25 and 35 obtained any credentials beyond a high school diploma. Equally concerning is the quality and quantity of post-secondary credentials in the United States.

Compared to the national high school graduation rate of 84%, the college dropout rate is sobering. Yet there has been improvement. The odds of a student completing college in 2015 were around the same as a student completing high school in the 1940s.

Nearly a third of students drop out during or after their first year of college.

While outcomes vary significantly between the non-profit, private, and public sectors, the lowest rates of completion, employment after school, and loan repayment tend to occur in two-year institutions. Among students who enrolled and did not transfer elsewhere, nearly 71% of students fail to earn a certificate or degree within eight years. The amount borrowed to attend a two-year school is usually much lower than for a four-year institution. Yet, as many as 68% of these institutions left their students owing more than they originally borrowed five years after they dropped out of college.

Four-year colleges and state universities do better. A majority of students in these institutions make it to graduation, earning a degree. Nearly 85% of students in public and private non-profit institutions complete a credential.

Before we dive into who’s dropping out of college and why, we wanted to see how many recent high school graduates pursue higher education annually.

College Enrollment

The chart below displays the percentage of students who enrolled in college within one year of graduating high school between 2006 and 2016.

As you can see from the data above, the rate of students entering college shortly after high school hovered consistently between 65 and 70 percent for the ten-year time span we reviewed (2006-2016).

That’s not much variation over time, and shows that around two-thirds of high school graduates enroll in college within a year of graduating.

College Completion Rates

According to a study by the National Center for Education Statistics, roughly 40 percent of public college students who enrolled in 2008 graduated from a four-year institution in four years.  By the six-year mark, 60 percent of students seeking a four-year degree had graduated.

At non-profit private colleges, nearly 53 percent of students enrolled in 2008 who were seeking a four-year degree graduated within four years.  At six years, nearly 66 percent of students seeking a four-year degree had graduated.

A 2018 study revealed that 23 percent of college students had dropped out after four years, and nearly 27 percent had dropped out of college after six years.   We look at dropout rates and the reasons students are dropping out in more detail below.

College Dropouts

According to a recent study by the National Student Clearinghouse, a nonprofit organization that performs research for schools throughout the U.S., around 23 percent of college students drop out by their fourth year in college.  We break out the data in more detail below.

But first, a note about two-year institutions.  It may seem strange to look at four year retention rates for a “two-year” school.

However, many students don’t complete their areas of study in two years, which is caused by a number of factors, including:  whether a class is passed the first time, the student’s course load each semester, when necessary classes are offered, and how many classes are required for an area of study, among others.

*Note: Numbers in the above chart are rounded and may not equal 100% for each segment.

As you can see, while a good portion of students at public four-year colleges had graduated at four years, 30 percent were still enrolled but hadn’t yet earned their degrees.

And, interestingly, the number of students who had transferred to another school but remained enrolled was pretty close across the board, with 10-14 percent of students switching schools but continuing their studies, whether that was at a two- or four-year institution.

The number of transferring and graduating students was also nearly equal among all types of college, with 4 to 5 percent of those transferring graduating college in four years.

However, after four years, around 17 percent of students at public four-year colleges had dropped out of college.  The dropout percentage nearly tripled for private for-profit four-year schools, with around 49 percent of students dropping out by their fourth year.

Nonprofit four-year colleges only had a 12 percent dropout rate at four years, while public two year colleges, sometimes called community colleges, had a 40 percent dropout rate at four years.

The dropout rate at two-year institutions was actually higher than their 32 percent graduation rate (when including those who transferred but graduated).

Who is Dropping Out?

Do males or females tend to drop out more often?  Does a student’s race or ethnicity factor into dropout rates?  What about age at enrollment—do younger or older students tend to drop out more often?

Part-time students were also more likely to drop out than full-time students, and parents’ education level played a role, too, as shown below.

Next, we broke down dropout rates by ethnicity, sex, age, and income levels.

American Indians/Alaska natives were more likely to drop out after two years at four-year colleges, with around 36 percent of students in this group dropping out, followed by black students at around 31 percent.

Asian students were the least likely group to drop out at either two- or four-year colleges, with only around 10 percent dropping out at four-year institutions, and 35 percent dropping out at two-year colleges.

Dropout rates at two-year institutions more than doubled from the four-year rates for white students, and the rate was almost double for Hispanic students and those of two or more races.

While still the lowest, the dropout rate for Asian students at two-year colleges was triple the dropout rate for this group at four-year institutions.

As you can see, males had a slightly higher dropout rate than female students after two years of enrollment.  This was true whether it was a two- or four-year institution, though the dropout rate for both males and females was significantly higher at two-year institutions, more than doubling for each group.

College students aged 19 or under were the least likely to drop out, with only 15 percent dropping out after two years at four-year colleges, and 38.5 percent dropping out after two years at two-year colleges.  Again, the dropout rate at two-year institutions was more than double the rate at four-year institutions.

Those over the age of 30 were less likely to drop out of four-year institutions after two years than either the 20-23 age group or the 24-29 age group, at 42.6 percent.  This rate was slightly higher at two-year institutions.

Perhaps surprisingly, students in the 24-29 age group were more likely to drop out than all other age groups at four- and two-year colleges after two years.

The socioeconomic data is pretty clear for four-year institutions—the lower the income level, the higher the percentage of students who dropped out.

Nearly one-third of those at the lowest income level dropped out of four-year colleges after two years, while only around 12 percent of those at the highest income level had dropped out after two years.

Interestingly, at two-year institutions, the dropout rates were nearly the same across all income levels, ranging between about 42 percent and 45 percent. However, for the most part, low-income students are more likely to drop out of college.

Finally, we wanted to take a look at whether having student loans (or the amount of the loan) impacted college dropout rates.

According to the chart above, students with the highest amount of loan debt ($9,501 or more) were the least likely to drop out, with only around 13 percent of those enrolled at four-year institutions and 19 percent of those enrolled at two-year institutions dropping out after two years.

Those with less than $4,500 in student loans were the most likely to drop out, with nearly one-third dropping out at four-year colleges after two years, and nearly 48 percent dropping out of two-year colleges after two years.

The graphs above may seem like they point to why students drop out—but what do the students themselves say about dropping out?

Why Are Students Leaving College?

The reasons for dropping out of college vary widely. It’s true that many former students find other economic opportunities, but for many, the consequences for dropping out can be detrimental and far-reaching.

Among the most prominent issues that could cause a student to drop out of college are financial conflicts or money. Both high tuition costs and the difficulties of paying bills while studying are critical factors. Concerns about affordability for higher education keeps many potential high school graduates from even applying.

While most schools prefer to focus on the outcomes directly related to a student’s ability to work, earn high marks, and graduate on time, skyrocketing tuition is a huge problem. The cost of college tuition has continuously increased, skyrocketing by 1375% since 1978. These numbers are climbing far faster than the cost of living. For most students, even part-time college is out of reach without financial aid of some sort. When high tuition and living costs are combined with substandard advising, the situation for a student can become dire.

Some of the money problems students encounter could be easily avoided. Most high school students are not taught basic money management skills or how to obtain and keep their financial aid once they reach college. Predatory lending by financial institutions to students has been somewhat regulated, and there are more protections in place for students than in the past. Yet many students still don’t fully understand the student loan process and the considerable expense involved. Taking on student loans represents a significant foray into more debt than buying a car, and for some, more than a small house. While most students accept debt as just another part of the American lifestyle, a college loan could forever change a student, especially if they drop out.

Poor advising practices by academic institutions also tend to affect student money problems and dropout rates. Many institutions that allow students to sign up for courses without declaring a major and follow a specific course progression can set students up for failure. This is particularly problematic when the conditions of a student’s financial aid require specific academic progress. If these students take too many courses not relevant to their progress in their major or chosen course of study or take too long to graduate, they can be placed on financial aid probation. Their eligibility for future aid can be placed in jeopardy. And then some students abuse financial aid, sending the costs for everybody up.

Working while attending school can be a challenging balance to maintain for many students. Tuition rates and cost of living in the areas where most major colleges are high. Many students have to work to meet basic needs while attending college. It can be a challenge to schedule classes around jobs. Not all entry-level employers who typically hire college students are flexible with scheduling. Nearly 54% of students who dropped out of college indicated they were unable to balance work and school.

Other factors can contribute to students dropping out of college. When students graduate from a high school with weak or inconsistent achievement standards, they may find themselves overwhelmed when faced with the structure and higher expectations of college. Declining academic achievement in high schools in the United States leaves students ill-prepared for the real world. For example, instructors and professors often find themselves overwhelmed with students who have a high school diploma but read and write on much lower levels. They are then forced to balance the rigor of their instruction with completion/graduation quotas set by the universities.

As many as 25% of students who take standardized tests for college readiness end up being directed to remedial college courses. Remedial courses are designed to get students up to speed in subjects such as math and English. While well-intentioned and in most cases, helpful, remedial college courses can become a bottleneck for students. They do not count for credits, delay graduation, increase tuition costs, and become discouraging for students who were already struggling. Fewer than 25% of college students taking remedial coursework go on to declare a major and graduate. Remedial education spending by community colleges tops $2.5 billion/year.

The reasons for dropping out are as varied as the students themselves.  Sometimes financial issues crop up that weren’t there before—such as a parent losing their job and no longer being able to help their college student with expenses, or losing financial aid due to grades or other factors.

Other students leave because of pregnancy, family care issues (needing to care for a loved one, whether a child, parent, or other relative), or because they never really wanted to attend college in the first place, but their parents made them attend.

In other situations, students feel alone on campus (whether it’s a small or large school) and haven’t made enough meaningful connections with other students to make it worth sticking around.

Students who are the first ones to attend college in their families are also more likely to drop out than other groups, though it’s unclear why that’s the case.

In some cases, the student becomes ill and is no longer able to attend school, or falls so far behind academically because of their illness that they end up dropping out over poor grades/inability to catch up.

And many schools don’t have the necessary academic supports in place to help struggling students, who end up dropping out because they fall too far behind academically.

Dropping out not only affects students, it affects college reputations and their finances, as shown in the infographics below.

Two-fifths of all college dropouts have a B average or higher—and nearly the same number of students shared the frustration that their classes weren’t worth what they’d had to pay for them—an opinion they were likely to share with friends, classmates, and family members.

Does Dropping Out Affect Your Career Options?

We take a look at how students who didn’t graduate college fare when compared to college completers in the chart below.

As you can see in the chart above, adults who attended some college, but didn’t graduate, earn about $1 less per hour, on average, than those who earned an associate’s (two-year) degree, and about $5 less per hour, on average, than those earning a bachelor’s degree, or four-year degree.

Surprisingly, college dropouts earn, on average, about $4 per hour less than high school graduates with a professional certificate or some vocational training.

Failure to complete college does tend to create a fairly large financial gap over a person’s lifetime, however. College dropouts earn, on average, $21,000 less per year than their college graduate counterparts.

That can add up to be quite a big difference over a person’s lifetime!

Keep in mind that these are just averages, however.  In some industries, such as the HVAC field, which does not require a college degree, technicians start around $20 per hour, and move up rapidly from there.  (Professional licensure is required, however.)

Construction is another trade that, while not requiring a college degree, also pays quite well.  And many professional hairdressers and make-up artists also earn well over the averages here, without needing a college degree.

The chart below lists a few of the many available jobs that don’t require a college degree and the average median 2018 salary for each.

Again, these are just a few of the many possible options out there.  Be aware that many of these options do require a professional license or certification, which can be obtained from trade schools or other programs.

However, those who don’t complete college are more likely to be without a job than those who graduated with a degree. While it may not be the best decision to ditch college, it doesn’t have to mean your future is derailed—if you seek out training and other educational opportunities in your chosen job field.
WHEN COLLEGE COMPLETION MATTERS

Stories about college dropouts such as Bill Gates or Steve Jobs are inspiring, but the reality is that for most students, dropping out of college can mean signing up for $25,000 less per year in income than those who graduate. It can mean a higher chance of becoming unemployed and fewer opportunities for jobs. Most students enroll in college because they want to increase their earning potential. Dropping out can not only decrease that potential but leave some students in an even worse position than before they enrolled.

Most of the job growth in the United States before the Great Recession occurred around occupations requiring post-secondary education, and the fastest-growing industries still pay the most for those with credentials. College graduates in the United States made an average of 56% more in 2015 than high school graduates. Wages rarely keep pace with cost of living increases. Every competitive edge in the labor market matters. Students without an education may find it extremely difficult to make a living, support their families, and remain above the poverty level without a college education in the United States. Few students initially enter vocational schools and the trades right out of high school. In many other developed countries, vocational training for students in high school and afterward is offered for students who decide not to enroll in college. Unfortunately, in U.S. high schools, the push is mainly for standardized testing and college preparation only, and outside of vocational trades, most employers in the U.S. still expect a degree.

Due to these expectations, college completion in the United States matters for most students because a degree makes such a difference in future earning potential. Employers in the United States typically have an expectation of a college degree for higher-paying jobs and advancement in careers. The labor force participation rate for college graduates possessing an associate’s degree stood at 69.6% vs. 57.7% for high school graduates in 2017. For those graduates possessing a bachelor’s degree, the numbers were even higher- a 73.3% labor force participation rate.

College graduation also affects unemployment rates. In 2017, graduates possessing a bachelor’s degree had unemployment rates around 2.5%, and those with a two-year or associate’s degree had a 3.2% unemployment rate. Job security may also be better for those graduates possessing a degree. During the Great Recession in 2009, graduates with a bachelor’s degree saw an unemployment rate of 5.3% compared with high school graduates, who saw a 9.2% unemployment rate.
The socioeconomic consequences for those who drop out of college are significant. A lack of education heavily influences inequality in the United States. College dropouts or those with no education tend to stay in low-income brackets, place more of a demand on government and social services, and struggle in the labor market to advance. Those possessing only a high school diploma are more likely to be in poverty, around 12.7%. Graduates possessing a bachelor’s degree or higher typically see poverty rates close to 4.8 %.
Students from low-income families often struggle to reach the point of enrolling and being accepted into college. When they struggle in college, even if they were successful in high school, they are more likely to drop out. Students who are “first generation” students and the first in their families to go to college fare poorly as well. As many as 89% of these students do not receive a degree or credential.
The likelihood of a student re-enrolling in college after they have dropped out is low, with only 30% returning to finish a degree.

WHEN COLLEGE COMPLETION MAY NOT MATTER

The push for students to enter college right out of high school is almost unanimous. Acceptance to a prestigious college can bring accolades and praise from high school counselors and parents and is undoubtedly an admirable achievement. But high school guidance counselors don’t always advise students to evaluate the return of investment for colleges. Slick marketing with beautiful websites and glossy viewbooks don’t tell the whole story about how dedicated an institution is to the long-term success of its students.

When students arrive on campus, they aren’t always prepared or motivated for the rigors of college. Some may not have even chosen a major. For students who are going to college because somebody told them to or because it’s expected of them, the road can be rocky. Struggling students who don’t want to be in college incur debt, take up spots in classes, and place a disproportionate burden on their institution’s resources.

After a cost-benefit analysis, some students determine it just isn’t worth it. Some jobs will pay well enough to offset the amount of debt needed to earn the degree required, and others, not so much. While most jobs require a college degree, others may not, particularly in vocational and trade. A short time in vocational school, apprenticeship, or even on-the-job training can sometimes mean making more money right away than those students who graduate and have to climb the career ladder while paying off their student loans. Nearly 40% of college graduates end up working jobs that don’t require degrees, and even more are working in fields that are not what they went to school for.

When weighing out the staggering cost of a degree and the financial burden of graduating with debt, it makes more sense for some students to pursue other avenues. In 2010, the dollar amount of student loan debts surged past consumer credit card debts in the United States. In 2019, the amount of student loan debt now tops $1.5 trillion, with over 2 million borrowers defaulting on their loans in the last six years.

College students who drop out are four times more likely to default on student loans than those students who went on to earn a degree. Over $120 billion in grants and loans are spent each year on students in the United States. The cost to taxpayers when students default on their federal student loans is high, with over $31 billion in losses estimated over the next ten years. The grace period for repayment for students who did not finish may change. Dropouts frequently find themselves owing far more money than anticipated to an institution, particularly those who were recipients of grants or scholarships. Most student loans cannot be discharged through bankruptcy. These events can keep a student who dropped out from ever completing a degree.

While many colleges are trying to place the same focus on completion rates and student success measures that saw high school graduation rates increase in the last twenty years, there is still much to be done. Too many institutions are continuing to struggle when it comes to serving their students, seeing them through to graduation, and enhancing their opportunities afterward. The most vulnerable demographics in their student bodies all too frequently slip through the cracks, yet taxpayer money continues to flow to underperforming schools that invest too heavily in everything but the success of their students.

In Summary…

More students tend to drop out of two-year institutions than four-year colleges, no matter what their age, gender, or ethnicity is.

A larger percentage of males than females tend to drop out, while American Indians/Alaska natives have the highest dropout rate among ethnic groups.

And, though probably not news to anyone, those in the highest income brackets have the lowest dropout rates.

College dropouts still have good job opportunities, and they can also have enjoyable careers.  However, it helps if they’ve had some prior vocational training and/or obtain a professional certificate or license; otherwise, they tend to have higher unemployment rates than their more educated peers.

Reasons for not attending college or dropping out are as varied as the individuals themselves, but include financial concerns, lack of connections on campus, and a desire (or need) to work and make money instead of spending money on classes.

Sources

  1. National Center for Education Statistics, Table 302.20
  2. National Center for Education Statistics, “Graduation Rates for Selected Cohorts 2008-2013; Outcome Measures for Cohort Year 2008; Student Financial Aid Academic Year 2015-2016; and Admissions in Postsecondary Institutions, Fall 2016.”
  3. National Student Clearinghouse, “About the Clearinghouse.”
  4. National Student Clearinghouse Research Center, “Persistence & Retention – 2019.”
  5. National Student Clearinghouse Research Center, “Yearly Success & Progress Rates – 2019.”
  6. National Center for Education Statistics, Table 326.50
  7. College Atlas, “U.S. College Dropout Rate and Dropout Statistics.”
  8. The Hechinger Report, “More High School Grads Than Ever Are Going to College, but 1 in 5 Will Quit.”
  9. National School Boards Association, Center for Public Education, “The Path Least Taken.”
  10. U.S. News & World Report, “25 Best Jobs That Don’t Require a College Degree.”