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The Greatest Benefits of High Student Retention Rates

January 4, 2023

Summary: Unlock the key to university success: High student retention rates. Discover how it leads to financial stability, a higher number of graduates, a strong reputation, and best-ranking positions. 

Are you aware of the key metric behind a thriving university? It's not just about enrolling students, it's about keeping them: Student retention.

Student retention refers to the percentage of students who return to a university after their first year of study and it holds the power to secure the university’s financial stability, reputation and naturally, its graduation rate. 

Keep reading to see how universities are affected by high student retention rates and what advantages it offers to students.

There are several reasons why high retention rates for students are crucial, let’s dive into it:

  1. Financial stability: A significant proportion of a University's funding rely on tuition income, therefore high student retention rates can help support financial stability. In fact, high student dropout rates can become a significant pain point for higher education institutions. According to data from the European Association for International Education, the average dropout rate for universities in Europe is around 20%. This means that universities are not only losing potential revenue but that they are also incurring additional costs associated with recruiting and retaining students. The estimated cost per student per year for European universities is around €10,000. It is of the essence for universities to understand the relevance of student retention, so they can dedicate greater efforts to their retention strategies. After all, when students return to the university, they are contributing to the university's bottom line.
  2. Reputation: Universities with high student retention rates tend to have a better reputation, which can attract more students and increase enrollment. Furthermore, students who are satisfied with their educational experience, are more likely to recommend the institution to others, which increases the “mouth-to-mouth” reputation of the university. An improved reputation can lead to more student applicants. According to a survey conducted by the Higher Education Policy Institute, 87% of students believe that a university's reputation is important when deciding where to study.
  3. Graduation rates: Higher graduation rates are closely connected to student retention rates.  It’s been proven that the first year is a critical period for students, as they are adjusting to a new environment, new expectations, and trying to find their place within a new community. Logically, when students return to the university after their first year, they are more likely to complete their degree, which benefits both the university and the student. According to data from the European Association for International Education, the average graduation rate for universities in Europe is 73%.

Overall, it’s easy to recognize that high student retention rates are key to the success of a university. It plays an important part in financial stability, a strong reputation, and higher graduation rates. 

Additionally, high student retention rates are often indicative of a positive student experience, which can include factors such as high-quality academic programs, a supportive campus community, and ample opportunities for extracurricular activities. This turns into a feedback loop where increased satisfaction among students can in turn lead to positive word-of-mouth, and increased enrollment.  Furthermore, a good reputation can also attract top-quality faculty and staff, which can enhance the overall educational experience for students. 

All in all, a high student retention rate is a key indicator of a successful and high-regarded university.

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