Over five years, such expenditures cost state and federal governments more than $9 billion, the American Institutes for Research said.
In "Finishing the First Lap: The Cost of First Year Student Attrition in America's Four Year Colleges and Universities," the group's researchers analyzed 2003-2008 data from the federal Integrated Postsecondary Education Data System and found that the 30 percent of first-year college students who failed to return for their sophomore year accounted for $6.2 billion in state appropriations for colleges and universities and more than $1.4 billion in student grants from the states.
The federal government provided $1.5 billion in grants to these students. The study did not include community colleges, where dropout rates are even higher.
Thirteen states posted more than $200 million each in funds lost, the study found.
Researchers did not examine the costs to taxpayers of students who drop out after their sophomore year. Nationally, about 60 percent of students graduate from four-year colleges and universities within six years.