The retention payoff: How colleges can maximize return on investment in student success

With tightening budgets and a limited influx of potential students, colleges and universities are prioritizing how to best invest in student enrollment and student success. With the declining number of students enrolling in colleges (especially community colleges) (Jenkins et al. 2020; National Student Clearinghouse Research Center 2020; Sedmak 2020), college administrators have to decide how to balance the recruitment of new students to fill in the looming gaps, with retaining the students they already have. Both scenarios are difficult, with outside forces such as a student’s background, their academic preparation, and the strength of the economy playing a role in whether they enroll and whether they stay at an institution.

Often, institutions focus more on recruiting new students without developing a clear and institutionwide retention strategy that covers the entire student lifecycle (Astin 1991; Pascarella and Terenzini 1991; Tinto, 1993). This despite the real financial gains — for both students and institutions alike — that come from increasing retention rates (Fike and Fike 2008). Community colleges in particular have an opportunity to lean in on college retention and degree completion.

On average only 40% of students at public 2-year institutions obtain a degree or credential within six years of starting (National Student Clearinghouse Research Center 2019) suggesting that 3.3 million of the 5.6 million first-time community college students that enrolled in fall 2018 will not complete a credential (National Center for Education Statistics 2018).

Considering the resources colleges already invest in educating and supporting students with professors, advisors, student affairs professionals, and the physical infrastructure that supports these personnel, each student that drops out is an investment not realized. Some amount of attrition is bound to occur, especially at open access institutions like community colleges (Delta Cost Project 2012). And community colleges must remain open access — meaning they will likely experience higher attrition rates than four-year institutions as they educate students with higher rates of personal and academic obstacles (Walters and McKay 2005).

However, the research is clear that even small increases in retention can lead to financial gains for the institution.

“Investing in retention programming is good business. Few, if any, other institutional investments will yield such a high return. Too often, increasing retention is not recognized as one of the most effective ways to add full-time equivalents, thereby broadening an institution’s revenue base. —Longenecker 2014”

The problem of attrition has been a major focus in educational and student development research over the last 40 years. Theories predicting attrition by Astin (1991), Bean (1990), and Tinto (1993) have been replicated in hundreds of studies, highlighting the many obstacles that students face in obtaining a certificate or degree, such as low grades, low commitment, low satisfaction, and personal and financial difficulties. In addition, students do not always find a good fit in their first college, a fact that is difficult to predict and fluctuates depending on student needs and the changing economy (Delta Cost Project 2012).

Recent literature has expanded our understanding of why students drop out by testing these classical models and others on a diversifying student body, noting that the classical models were originally conceptualized and tested for the largely white, full-time traditionally aged student populations at residential four-year colleges and universities. Community colleges educate a larger percentage of racial/ethnic minority students, part-time students, and older students than any other sector of higher education (Ginder et al. 2019), and have the lowest persistence and retention rates (between 45-50%) (National Student Clearinghouse Research Center 2019). Research shows that these student populations experience added obstacles to degree completion, such as family considerations (like child care), outside employment, undeveloped study habits, and absenteeism (Bean and Metzner 1985). Thus, older students (those whose first college entry age is 21 or older) are less likely to come back for a second year of college (~45%), or even transfer to another college (~48%), than the traditional-age college population (80% and 70%, respectively) (National Student Clearinghouse Research Center 2019). Similarly, among part-time students at public two-year colleges, only about 51% will come back to the same institution the second-year (National Student Clearinghouse Research Center 2019). And only approximately 44% of Black students continue their enrollment in the same public two-year institution where they started (National Student Clearinghouse Research Center 2019).

Community colleges educate a larger percentage of racial/ethnic minority students, part-time students, and older students than any other sector of higher education, and have the lowest persistence and retention rates.

While colleges and universities cannot control many of the factors that predict college attrition (such as the cognitive and noncognitive abilities students bring to college (Oseguera et al. 2009)), they can consider these factors when structuring classes and support. For instance, students who feel a lack of academic and social integration with the school are more likely to leave (Tinto 1993). Some students, such as Latinx students, may experience culture shock, making it difficult to traverse the college environment as they look to navigate a new culture while staying connected to their home community (Oseguera et al. 2009).

Institutions that make such transitions welcoming rather than “culturally exclusive” (Oseguera et al. 2009) can help students navigate such obstacles. Regardless of student background, feeling connected to others, such as faculty, advisors, and administrators, is a consistent predictor of retention, according to the seminal compendium of research on college curated by Pascarella and Terenzini (1991).

Having positive mentoring experiences and feeling welcomed and informed by school personnel can influence whether they persist to a second year (Oseguera et al. 2009; Walters and McKay 2005).

While most of the students who leave a college without a credential do so within the first

two years, a not-insignificant group of students leave well into their degree progress, meaning those colleges spent more time and money educating those students who ultimately dropped out. Students enrolled in four-year programs who make it to junior or senior year without a degree “cost” the institution the most — upwards of $40,000 (Wellman et al. 2012). But this phenomenon does not just pertain to four-year colleges. Any student who comes close to degree completion without completing costs the institution more than those who drop out quickly.

One may think that the students leaving college are those the least academically prepared, but that is not always the case. Students with As and Bs are also leaving without attaining a college credential anywhere. In one study, “fully 40 percent of dropouts had estimated GPAs above 3.25 (and these accounted for 43 percent of spending). And 17 percent of the students who left (accounting for almost 17 percent of spending) had “mostly As” (GPA above 3.75 ) — a higher proportion than the C – F range combined” ( Wellman et al. 2012).

For the individual institution, for every student they lose to attrition, they must admit a replacement student in addition to their typical enrollment, which is not an efficient enrollment plan (Marthers et al. 2015). When students drop out, the institution is “out” the costs to recruit and enroll the student and the “lost” financial aid. And because community colleges have the lowest rates of college completion, upwards of ⅓ of their institutional spending is spent on students who never finish (Wellman et al. 2012).

Improving retention can generate hundreds of thousands of dollars for an institution (Longenecker 2014).

However, enrollment management offices do not always focus on the completion aspect of the college equation, as retention and completion is typically in the hands of the academic and student affairs departments (Marthers et al. 2015). This is a missed opportunity. If students are dropping out along the pathway to degree completion, enrollment management can use the information gleaned about these students to 1) more effectively recruit students, and 2) find patterns for why students drop out, and 3) pass this information on to academic and student affairs departments to improve outreach and interventions (Marthers et al. 2015). Utilizing a student lifecycle Constituent Relationship Management solution, institution personnel at the marketing and admissions levels can interact and analyze data collected during the student’s enrollment and retention processes, during classes, graduation, and even as alumni.