College Retention, Graduation Rates, and Enrollment

Abstract The continued decline in college enrollment in the United States will intensify competition among colleges to attract new students. This, in turn, will also increase the impetus for colleges to retain current students. While past work has primarily focused on the examination of best practices for student success and increased retention rates, this paper models the relationships between retention, academic progress, enrollment, and graduation outcomes to generate new policy insights. To calibrate the model, data were sourced from the United States National Center for Education Statistics Integrated Postsecondary Education Data System’s surveys from 2017 and 2022. Results suggest that the retention elasticity of enrollment in public institutions (77.1%) is statistically higher than in private not-for-profit (75.9%) and private for-profit (75.6%) institutions, implying that improving retention rates will lead to larger gains in enrollment in public colleges. On average, the theoretical cap on enrollment decline that could be offset by improving first-year retention is around 25%. The model also predicts that an increase in the first-year retention rate in public institutions from 75.1% to 85% is expected to increase the four-year and five-year graduation rates from 35.6% to 40.3% and from 48.1% to 54.4%, respectively. The findings have important implications, particularly for college administrators, as effective retention policies can both increase long-term enrollment and improve four- and five-year graduation rates.