Association of Freshman Retention Rates with Instructional Expenditure and Residential Status : A Case Study for Large Public Colleges

Retention is a key indicator of institutional effectiveness in education research. Retaining full-time freshman students has been a long-standing problem for institutions of higher education. Overall, 40% of U.S. college students leave college among which the majority are freshman students. About 30% of freshman students drop out before their sophomore year of college. The primary causes for leaving college include financial pressure, falling behind in classwork, lack of social connections, and loss of family support. Higher educational institutions need to understand the dynamic between different expenditures and freshman retention rates to responsibly and strategically allocate funds to what will best support institutional success. This study investigates how freshman retention rates at large public colleges are associated with instructional expenditures and residential status. Findings of this study indicate that regarding freshman retention at large public colleges, spending more money on instruction goes further for residential colleges compared to non-residential ones. In other words, for most levels of instructional expenditure, residential colleges have higher freshman retention rates than non-residential colleges. Findings of this study can assist higher education institutions in directing their efforts toward what will best support institutional success.