Affiliations: [a] University of Wisconsin–Milwaukee, School of Business
Administration, P.O. Box 742, Milwaukee, WI 53201, USA
Abstract: The declining pool of new high school graduates has led colleges to begin
programs to attract a new clientele of older students and encouraged colleges to
consider methods to increase the retention rates of the already enrolled
students. Using data from published college guide books, this paper investigates
a sample of all private U.S. four-year colleges and universities to uncover some
of the determinants of freshmen retention rates. Two and three stage least
squares are used to estimate a system of simultaneous equations. The results
indicate that the acceptance rate, a required interview, and the average
collegiate SAT score are major determining factors of retention rates at U.S.
private colleges. A required interview increases the retention rate four
percentage points. However, total enrollment would not be improved by enforcing
stricter acceptance rate criteria because the probable loss in freshmen
enrollment would not be sufficiently made up by greater retention rates.