College Retention Rates Improving at Two-Year Schools, Declining at Four-Year Schools

An ACT survey shows that the first-to-second-year retention rate at U.S. two-year public colleges has risen to its highest level in 27 years of research, while the retention rate at four-year private colleges has dropped to its lowest level during that time.

Overall college retention rates—the percentage of first-year, full-time students who return to the same institution for their second year of college—remain relatively stable. Just two-thirds (67 percent) of all first-year students at U.S. two-year and four-year colleges returned for their second year of school, compared to 68 percent in 2005 and 66 percent last year. These data were gathered in ACT’s annual survey of more than 2,500 two-year and baccalaureate colleges and universities across the country.

“College retention is a very challenging problem facing our nation,” said ACT CEO Jon Whitmore. “If we are to meet the goal set forth by President Obama to increase the number of young adults who earn a college degree, we must not only ensure that more students have access to college, but also make certain that they are well prepared to succeed once they get there.”

Although retention rates continue to be substantially lower at two-year than at four-year institutions overall, the gap has narrowed in recent years. The percentage of students at two-year colleges who returned to the same institution for their second year of school has been trending up, from 53 percent in 2005 to a current record high of 56 percent. The retention rate at four-year private colleges, in contrast, has been trending down, from 75 percent in 2005 to the current 72 percent.

The reasons for this shift may be related to problems in the economy, said Wes Habley, ACT principal associate, who has been conducting analyses of retention data since 1985.

“With many jobs gone and fewer new jobs available, high school graduates and newly unemployed workers may be seeking the fastest, least expensive route to gainful employment,” he said. “Two-year colleges tend to be less costly than four-year schools and offer programs that provide entry into specific jobs. Those factors may increase students’ motivation and incentive to come back for their second year.”

Two-year public colleges also tend to be more responsive to the marketplace than four-year institutions. “Community colleges are typically more driven by local economic factors and employment needs than are four-year colleges and universities,” he said. “As a result, students can often see a more direct link from the program to a job.”

The decline in retention at four-year private colleges was also noted. This year, retention rates at four-year private colleges (72 percent) fell behind those at four-year public colleges (74 percent) for the first time ever, a trend that may also be related to the economy.

The 2010 edition of ACT’s periodic research report, What Works in Student Retention, suggests that retention practices have changed in the United States over the past several years. The complete data sets for both studies are available at http://act.org/research/policymakers/reports/graduation.html and http://act.org/research/policymakers/reports/retain.html.