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Politics & Government

Report Shows Pennsylvania Spent Over $200 Million on College Dropouts

PHEAA argues money was used for education and so served its purpose.

Editor's Note: Darwyyn Deyo is a reporter for PA Independent.  She can be reached at darwyyn@paindependent.com.

A report from the American Institute for Research (AIR), a behavioral and social science research organization, found Pennsylvania spent $232.9 million between 2003 and 2008 on students who did not continue after one year of college, with $198.4 million spent on public institutions alone.

The study defined college dropouts as "students at four-year colleges and universities who left school before their sophomore year during a five-year period" and found only 60 percent of students graduate from four-year colleges and universities within six years. 

Identifying President Barack Obama's "college completion agenda" to make the United States more educationally competitive with other countries, the study argued the prospect would be financially difficult.

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"In the last few years, there have been increases in the amount of federal grants going to low-income students," reads the report. "Most of this money comes through Pell grants-the primary means by which the Federal government supports low-income students who might otherwise not be able to afford higher education...Over the last five years, approximately $1.5 billion in federal grants went to first-year-only students."

Examining all 50 states, the report showed that between 2003 and 2008 Pennsylvania appropriated $168 million for college students who left after the first year and did not return within five years to complete their degree. Public universities received $165 million of that funding.

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Comprising the rest of state monies, student grants for all higher education institutions included $64.9 million which went to college dropouts, with the federal government spending another $56 million on dropouts. Pennsylvania spent $33.4 million on state grants on dropouts at public institutions, with the federal government spending another $30 million.

Between state and federal grants, $120.9 million went to students who would drop out of college after their first year and not return within five years to finish their degree. Nationwide, over $6.2 billion was spent by state governments to college dropouts with 12 other states besides Pennsylvania posting over $200 million of state funds lost to first-year-only students.

With the federal government's funds added in, that cost increased to $9 billion over the five year period.

Annually, that averages out to $1.8 billion for the states and federal government. For Pennsylvania, which appropriated $9.6 million last year alone for the state Department of Education in 2009-2010, the five year average annual sunk cost on dropouts was nearly $46.6 million.

The Pennsylvania Higher Education Assistance Agency manages student aid in Pennsylvania. Created and funded by the General Assembly, its appropriation for 2009-2010 was over $388 million, though funding for the next year looks bleak, said Keith New, spokesperson.

"We've no idea what's going to happen this year," said Mr. New. "[The state grant program is] designed to provide access and choice for Pennsylvania students. It's need based; if they've received a $3,000 grant for the fall semester and they decide to take a couple years off, I don't see how we can go back and say ‘you now owe to the state.'"

Mr. New said the average per semester state grant paid out last year was $2,296 while the maximum state grant paid out was $3,541. There were over $185,000 students covered by state grants this year. With the state grants going directly to the university, Mr. New said the program was not set up to recoup costs if a student finished a semester and decided not to continue.

"The grants aren't for four years, they're not tied to a degree," said Mr. New. "They're for the semester. The student did their part, they did academic progress and they can reapply for a grant the following semester if they choose to do so or if they're eligible. It's not our business to say ‘you didn't get this degree so you lost us money.' The program's not set up that way."

If a student drops out in the middle of a semester, however, Mr. New said the university returns the unused portion of the state grant, a process he said was closely audited. Arguing it would be unfair to add "hardship" to a student who dropped out of college for "personal" reasons, Mr. New said the grant could not be converted into a loan and passed on to the student because it was used for education.

"It's not recovered but it was also attached to a period of education received by the student," he said. "The grant dollars are disbursed to the school and it's used to pay for their tuition costs they were making. It wasn't money that was thrown away; it was used to pay for that semester."

But with states across the country facing a slew of financial obstacles, funding first-year-only students will not make the situation any easier.

"The nation will have a difficult time reaching the administration's policy goals unless we find ways to increase the number of students who return to complete their college degrees," the AIR report states. "We continue to spend far too much money on students who don't even finish the first lap, let alone fail to cross the finish line."

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