By Sacha Chiniara, Research Analyst
In a single year, Eduventures estimates that American colleges and universities lose $6.6 billion in tuition to first-time, first-year student attrition alone. Factor in the cost to replace each lost enrollment, and the national cost of first-year attrition exceeds $10 billion.
With the current approach to retention, that figure stands to swell over the next decade, given that the populations of high-need and high-risk students will grow to account for a greater share of the college-bound population. Poverty rates have increased over the last decade, as has the number of students from key demographic groups that have shown a strong correlation with risk of attrition.
While legislative actions, such as the forthcoming College Scorecard and performance-based initiatives, recognize the importance of retention, both approaches share the same fundamental flaw. By comparing individual institutions to a blanket set of standards, they fail to account for the unique institutional factors that impact retention.
Knowing that a combination of factors shapes retention at each institution, we have developed the Eduventures Retention Ratings System to score actual retention rates against a predicted metric for each institution. This predicted retention rate estimates how an institution should perform based on academic, social, environmental, and financial indicators. We found that, out of 1,186 rated institutions, 42% perform below their predicted rate, 11% perform as expected, and 47% perform above their predicted rate.
Source: Eduventures Retention Ratings
Comparing your institution to itself not only enables you to gauge where your institution stands, but also allows you to set more realistic goals for your students and community. Most rated institutions fall into the “moderate over performer” or “moderate under performer” categories, with retention rates within 3.5% to 9% of our predictions. For moderate under performers, a slight increase in retention can have a big impact. At an institution with 10,000 students and an annualized tuition rate of $34,000, we estimate that just a 1% increase in retention would secure $3,400,000 in tuition dollars each year.
Some of the over performing institutions in our ratings have 67% retention rates. By many standards, these would be under performing institutions. Given their institutional indicators, however, these retention rates are roughly 9% higher than what we would expect for an institution serving their student populations. For institutions with a mandate to serve at-risk populations, these over performers may offer more applicable models for improvement than institutions with 90% retention and drastically different student profiles.
To see where your institution stands and to learn more about our retention ratings, please visit our Retention Ratings page. More about retention high performers can be found in our report, Lessons from Retention High Performers: Successful Strategies and Best Practices, and in forthcoming case studies on the individual institutions.
 Based on a formula developed by Neal Raisman in “The Power of Retention More Customer Service in Higher Education.” Annualized tuition estimate based on average across four-year institutions as reported by National Center for Education Statistics for 2011-2012.