For a majority of American students who attend four-year colleges, four years is just the beginning. According to a National Center for Education Statistics 2019 report, only 41% of students who enter four-year colleges graduate within four years. Only 60% graduate within six years.

But the issue of students “stopping out” of college—leaving school with the intention to return— or taking too few credits per semester to graduate on time rarely enters pre-college conversations. According to a study by UCLA, 90% of freshmen expect they’ll graduate in four years or fewer and pay a maximum of four years’ tuition. The disconnect between expectation and reality can cause students at risk of stopping out to feel isolated, and can make it harder for them to find the resources they need to stay in school.

That can be a real problem. But it’s also an opportunity for colleges, especially those competing more fiercely every year for first-year students. Open communication between counselors and students who’ve stopped out or who are at risk of stopping out may help improve retention. One-on-one counseling; planned, deliberate breaks from school; and direct outreach to stopped-out students can all help encourage students to return to college or stay in the first place.

Of course, due to COVID-19, many students are concerned about the safety of returning to campus. Some worry they’ll have nowhere to go if campuses remain closed. Some worry about the quality of online instruction. Some lack the resources to participate remotely. On top of this, many families are facing increased financial difficulties due to unemployment, business losses, medical costs, and more. The added challenges of the pandemic mean that more students either are electing to take time off from college or go part-time, or have no choice but to stop out.

The longer a student takes to finish college, the more it costs her, both in education expenses and in opportunity costs. Education nonprofit Complete College America estimates, “Every additional year a bachelor’s degree-seeking student spends in college costs an average of $68,153 in additional tuition, fees, and living expenses, plus forgone income.”

And it isn’t only students who pay the price. In the 2010–11 academic year alone, the Education Policy Institute estimated that stopped-out and dropped-out students cost colleges $16.5 billion in revenue.

What’s more, students in their fifth and sixth years often have fewer resources to pay for college than they had as freshmen. To help fill their unmet need, colleges that lack the resources for increased discounting might consider innovative financing options. Income share agreements (ISAs) tailored for students at risk of stopping out offer one way to fill that immediate need. ISAs provide students with up-front funding in exchange for a fixed percentage of post-separation income for a defined period of time. ISA programs designed for students at risk of stopping out, or for students who’ve stopped out already, can help colleges reach a student population in need of their support. That support may come back to schools in the form of tuition, improved retention, and higher graduation rates.

To learn more about ISAs and how Vemo Education can benefit your institution, contact us today online, or at info@vemo.com or 703-831-7231.

  1. https://nces.ed.gov/programs/raceindicators/indicator_red.asp
  2. https://www.heri.ucla.edu/monographs/TheAmericanFreshman2019.pdf
  3. https://www.edsurge.com/news/2020-08-17-unprecedented-numbers-of-students-are-taking-a-gap-year-what-should-they-do-with-the-time
  4. https://hechingerreport.org/colleges-confront-the-simple-math-that-keeps-students-from-graduating-on-time/
  5. https://files.eric.ed.gov/fulltext/ED562625.pdf