Can higher ed re-engage stop-out students and help them graduate?

Collaborations between financial services and education leaders aim to address financial challenges and support stop-out students in completing their degrees.

By: Allison Minutillo
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In today’s educational landscape, the phenomenon of “stop-out” students has become increasingly prevalent. In 2024, approximately 36 million Americans had some college education but no degree, a 2.9% increase from 2023. A “stop-out” refers to a student who begins their college education but temporarily or indefinitely halts their studies due to various reasons, such as financial pressures, personal situations or balancing work and education. Unlike dropouts, these students often intend to return to their studies but lack a clear plan or timeline.

The Financial Realities Driving Stop-Out Trends

Deciding to stop out often prioritizes immediate financial stability over long-term educational goals. With work often taking priority, 76% of students cited financial reasons as a primary driver.

Economic pressures, including high student loan debt and the rising cost of living, have made it increasingly difficult for students to justify their continued investment in education. In 2023, the average U.S. household had approximately $37,000 in student loan debt. Simultaneously, inflation has raised basic costs, forcing students to make difficult choices. Low-income students are two to three times more likely to stop out than their higher-income peers.

This financial strain is particularly acute for first-generation college students and those from middle-class families. First-generation students often face additional burdens, such as the need to support their families financially while pursuing their education. Meanwhile, middle-class families frequently find themselves in a financial gray zone, where they earn too much to qualify for significant financial aid, but not enough to cover tuition and related expenses comfortably.

Unexpected life events, such as family health crises or personal health issues, often derail even the best-laid academic plans. For many students, the value of their degree comes into question. If they perceive their education as not yielding tangible outcomes—like a clear path to a high-paying job or a stable career—they may opt to stop out to enter the workforce sooner. The Hechinger Report highlights that 43% of students who stopped out believed that a degree wasn’t worth the cost, particularly when they found jobs without a diploma.

The Ripple Effect of Stop-Outs on Colleges and Universities

Stop-outs cause a ripple effect. A university that hits its enrollment targets early in the academic year may appear financially healthy on paper; but, if many students eventually stop out, the institution can face serious financial strain.

“43% of students who stopped out believed that a degree wasn’t worth the cost.”

Student retention rates, therefore, become crucial. According to the National Center for Education Statistics, the national average retention rate is 81%, but stop-out trends threaten this figure. Institutions that fail to retain students face financial risks and damage to their reputations. Potential students may perceive these schools as offering less value or lower-quality programs if they see high attrition rates, which can lead to further enrollment declines.

Proven Strategies to Re-Engage Stop-Out Students

Higher education leaders must adopt new strategies to retain and re-engage students. One of the most effective ways to do this is by demonstrating the tangible value of a college degree. Education leaders must cultivate, prioritize, and provide clear, data-driven evidence of the real-world outcomes that students can expect. This includes sharing salary data, career prospects, and success stories from alumni who have navigated the same economic challenges.

Institutions should also invest in emotional and financial support for students. Schools can alleviate some of this pressure by offering financial planning tools, workshops, and trained advisors to help students navigate their financial options. For instance, a partnership between Arizona State University and EdPlus helps provide stop-outs with personalized financial plans and resources, leading to a 20% re-engagement rate among stop-out students.

Financial services can play a key role in this effort. By partnering with colleges and universities, financial services companies can provide tools like salary calculators, loan repayment plans, and financial planning advice tailored to students. Early financial literacy education is key to fostering long-term financial health, and colleges are uniquely positioned to introduce students to these concepts.

Using Data and Personalization to Drive Re-Enrollment Success

  1. Go-to-Market (GTM) Strategy: Re-engaging stop-outs starts with a focused GTM strategy that aligns with institutional goals and addresses why students leave. Institutions need to identify key barriers that lead students to stop out, such as financial constraints or disengagement, and tailor messaging that focuses on the tangible benefits of returning, including career outcomes and financial tools.
  2.  Audience Prioritization: Segment the audience based on factors such as income level and academic progress. Focus on students closest to graduation or working professionals who may benefit from flexible programs. This prioritization makes outreach more targeted and effective.
  3. Data Insights: Mining CRM data can reveal why students stop out and help predict who is at risk. This data-driven approach allows institutions to intervene early while measuring the ROI of re-engagement efforts.
  4. Re-Engagement Workshops: Partner with the right agency consultants to host workshops to re-engage stop-outs. Unpack the student experience to identify micro and macro opportunities to draw the student back into the educational experience. 
  5. Message Matrix: Tailor messaging for different student segments, highlighting financial tools and clear career outcomes. A message matrix ensures that all communications—whether email or digital—reinforce these key points.
  6. Digital Experience: Create a seamless digital experience with tools like loan calculators and live chat support to help students make informed financial decisions. Personalizing this experience can simplify re-enrollment by building re-engagement portals, analyzing CRM data and creating targeted marketing campaigns. 

With the right strategies, institutions and financial services providers can help students navigate financial pressures and complete their education.

Allison Minutillo

Allison Minutillo

Contributor

Allison Minutillo was the creator and former host of the Rebel Leadership® Podcast and is now the CMO at Primacy, an agency in Connecticut that accelerates growth by building exceptional brand experiences and cultivating excellence in every facet of its operation.


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