Colleges' retention of 2nd years up
The 2010s saw more students return for a 2nd year at their college
More are staying for the entree after tasting the appetizer.
Self-reported IPEDS numbers showed that the 2010s saw a steady rise in the proportion of entering students returning to the same college for a 2nd year. Significantly, all subsectors of undergrad reported improvements in this metric, in the range of +4 to 6%, with most individual colleges performing well.
Students returning for a second year after enrolling the prior fall up from 67% to 72% in 2019 across US undergrad programs
2-year colleges show lower levels of student success (63% in 2019 measuring only full-time students) but improved more than the national average across the decade
Public schools are better at retaining students than private colleges but the margin of difference is small
Changes in enrollment process and cost do not on the surface appear to be drivers of the improvement across the 2010s. Enrollment: open-admissions colleges improved retention more than selective schools in the decade, so there is no industry-wide upgrading of enrollment practice apparent in the numbers. And college pricing was static vs family income as retention improved, so improving affordability is unlikely to be a cause. Another possibility is that the composition of the overall undergraduate body is a driver: over the period studied, the proportion of older (over age 25) learners fell and prime age (18-24) rose. We would need more detailled statistics to assess that as a possible cause. Let’s move on to overall statistics and observations about some of the successes and laggards.
4-years retain more students than 2-years but both types are improving.
Retention has been the subject of intense and wide-ranging efforts and research. As this is a business blog, we won’t be surveying these efforts but instead will look more closely at what successes and failures in the retention area, which by necessity are reported more promptly than graduation rates, reveal about enrollment performance of individual schools.
Some handy rules of thumb to evaluate schools:
Flagship state universities generally see 85-90% of their students return for a second year. Some schools excel - the University of Washington, UW-Madison and UCLA all have retention rates above 95% - and some are weaker.
Selective schools retain at higher rates, unsurprisingly. For example, 99% of MIT’s class of ‘21 entering cohort returned for a second year. Schools like Brown and Duke retained 98%. In general, selectivity is negatively correlated with retention, which will come as no surprise, and the relationship is nonlinear.
Successful Associate programs should generally retain more than two thirds of their students for the second and final year. To take a successful example, Imperial Valley College, a 2-year program enrolling over 8,000 students located in southern California near the Mexican border, retains nearly three-quarters of its entering class, improving from a much lower level a decade ago.
National onlines can have very low retention rates. The largest of them, Western Governors, reports retaining a very respectable 73% of its entering students but uses a tiny sample to arrive at that ratio. There are problematic patterns in this sector, which we will look at in more detail later.
Falling retention rates and climbing admissions rates are often signs of organizational and financial problems. But not in all cases. Significantly, these numbers are unaudited and are subject to gaming, so use them with caution.
We will be looking at this dataset but will start with a positive story and then point out some less happy ones that likely represent advanced indicators of issues.
California Success Stories
We would expect highly competitive California schools like Berkeley, UCLA and USC see basically all their students return for the second year — and they do. The retention statistics for the less selective California institutions become more interesting as the selectivity of colleges drops and, in this category, retention becomes more useful as a guide to student satisfaction.
The Cal State (CSU) network is both unusually selective for a secondary “State” system and retains its students at high rates. A school like Long Beach State is difficult to get into (it hit a school-record 28% admissions rate in the 2018 cycle) and predictably retains close to 90% of its students, only a tad below UCLA or Berkeley. But the CSU system also provides two interesting outliers where the retention exceeds what one would expect from the selectivity: San Francisco State and San Jose State, both schools with about 26-27,000 students. SF State is not really all that selective; it accepted 72% of applicants, a very humdrum ratio by the standards of the overheated California enrollment climate, but 78% of its entering class returned after the first year. This is above the norm and points to the school doing something right. San Jose State is a bit more selective, accepting approximately 55% of applicants, but retains a very strong 86% of its students, again outside the norm.
The combination of high retention with moderate selectivity is an interesting metric, because it suggests an objective measure of student satisfaction and preparation. Reasonably selective schools can be accessed by good students - they are not a lottery ticket like getting into CalTech - so a dissatisfied first-year can walk away without getting off some coveted fast track. Logically, they need to provide a terrific experience to retain a really outstanding ratio of their entering classes. And the enrollment teams for these colleges may be doing a very good job of recruiting students who are a fit for their programs. Both San Francisco and San Jose State appear to excel here.
Using retention “outperformance” as a guide, we can identify two other schools that are outliers: Appalachian State in North Carolina is actually easy to get into - the acceptance rate has been trending up the last decade and hovers around 70% these days - but the students that attend don’t leave. In 2019, 88% of the first year class returned. Another outlier is Rowan in New Jersey, which accepts a similar ratio of applicants as Appalachian State and re-enrolls 83% of them.
Without creating some newfangled metric for this inverse relationship between admissions and retention, it helpfully suggests a real program performance metric when used in a thoughtful way. Don’t ask the students what they think; look at what they do. The students at these four colleges are voting with their feet and staying.
The less happy stories
Increasing admissions rates and falling retention are signs of a troubled situation. Such schools struggle to attract students and the ones they do enroll are less and less satisfied and successful. For example, the enrollment and retention data for Hampshire College in Massachusetts clearly displayed problems several years ahead of its near shut-down in 2020. Turning from the four happy stories above, retention and admissions reveal some schools and systems that have hit the headlines, and others that have not come to general attention, at least yet.
University of Alaska - The restructuring in the University of Alaska system has been in the news and is the result of long-developing enrollment problems that affect both the Anchorage and Fairbanks campuses. The two schools combined enroll roughly 20,000 students with issues being more pronounced at the larger Anchorage campus, where retention of 2nd year students has fallen from a mediocre 70% in 2009 to 61% in 2019, exceptionally low for a state flagship campus. Anchorage has also been accepting more of its applicants, increasing from 72% to 83% in 2019, perilously close to open admissions. Anchorage’s absolute enrollment numbers are stable but these underlying metrics are worsening. The Fairbanks campus metrics are a bit better but lie below average. Predictably budget woes have arisen in this situation and a full restructuring was initiated formally in 2019 and is ongoing.
The Alaska situation is well known in higher ed but we identified other schools displaying performance issues, some of them surprising.
Illinois State (Normal) - Illinois is simultaneously experiencing a decline in high school graduate numbers and an outmigration of those decreasing high school graduates. We have been arguing that the Demographic Cliff is a myth for the US overall but, for Illinois, it is a very real phenomenon. Illinois high school graduation class sizes have fallen 7% since 2009 and WICHE projects a further decline by 2031 to a level 16% below 2009.
Beyond the falling number of high school graduates, relatively few of them enroll in Illinois and in its state schools. In 2018, new in-state college entrants numbered just 52% of Illinois preceding high school graduating class, far below the national average of 66% and the neighboring states.
Such an environment punishes regional universities such as Illinois State. The flagship campus in Urbana-Champaign has maintained its acceptance rate in this situation, to its credit, while the U of I-Chicago Circle campus, located in a big city close to hundreds of thousands of enrollment prospects, has become somewhat less selective while generally maintaining its overall metrics. That leaves Illinois State, located in a fairly small town in the countryside, struggling with an admissions rate deteriorating from a reasonable 62% in 2009 to 89% in 2018. The retention rate isn’t awful in absolute terms but it too has deteriorated, from a very solid 85% ratio in 2009 to a pedestrian 79%. While the school has emphasized recruitment in the last few years to counteract this situation - an effort which has affected the numbers positively - its situation is precarious, especially given the State of Illinois’ well-publicized budget travails.
Albany State (Albany, GA) - Albany State is a 6,000 student HBCU which as recently as 2008 and 2009 accepted just 30% of its applicants. The college saw a gradual deterioration of its retention and has engaged a consulting firm to implement an early intervention program to stem the decline.
This decline in retention coincided with a weakening enrollment outlook, with Albany State admitting approximately 90% of applicants in 2017 and 2018 and declining test scores by enrolling students. The college is heavily dependent on tuition revenues, does not have a sizable endowment to weather blows, is not able to provide significant financial aid to lower its (very reasonable) price and is having difficulties attracting and retaining students. Albany State is not the only HBCU to face these sorts of issues, unfortunately, with Alabama A&M and Texas Southern both displaying deteriorating retention metrics along with enrollment challenges. Albany State as recently as a decade ago was a high-performing school with a decidedly competitive application process and above average retention numbers, but its market outlook has dimmed.
These snapshots of 8 colleges show both success and challenges. The conventional wisdom that current student preferences put regional schools at a disadvantage is absolutely borne out by the retention data. For example, two Massachusetts regional 4-years, Bridgewater State and Westfield State, also show retention and enrollment warning signals, along with Pennsylvania’s PASSHE system, which we covered previously. In our upcoming installments on retention, though, we will turn to a sector with particularly acute retention issues, the national online colleges.
Our corporate website contains this material and more technical reports, so please visit us there for more information.