Wasted Billions?

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A new study by the American Institutes for Research indicates that college dropouts cost the American taxpayer billions of dollars. Well, sort of. According to the report:

We focus on the high costs associated with the large number of students who do not return for a second year at the college where they first enroll. …During the five years between 2003 and 2008…states appropriated almost $6.2 billion to colleges and universities to help pay for the education of students who did not return for a second year. States gave over $1.4 billion and the Federal government over $1.5 billion in grants to students who did not return….

Various states have it upon this new report as a way to demonstrate horrible waste in higher education. Hannah Wolfson writes in the Birmingham News, for instance, that “students who didn’t return to their colleges after their first year cost Alabama more than $170 million between 2003 and 2008.” Meanwhile, “students who quit after a year waste millions in taxpayer funds,” the Chicago Sun-Times screams.

Talk of “cost” and “waste” is a little questionable here. It doesn’t actually cost taxpayers any more money when students drop out of college. Taxpayers may have spent a total of more than $9 billion in federal financial aid to educate students who did not return sophomore year. But if the students returned taxpayers would still have spent that money. In fact, they would end up paying a good deal more than that, since the students would then receive financial aid for all four years they stayed in college.

The report does demonstrate, however, that education money is perhaps not really efficiently spent. If government-based financial aid for underprepared college students is going to cost $9 billion over five years, it would be best if those students had something to show for it in the end.

Money for students who drop out after one year of college accounts for between 2 and 8 percent of states’ total higher education appropriations, according to the report. [Image via]

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer