College persistence and student attitudes toward financial success

College Student Journal, June, 2005 by Karen Leppel

The student's assessment of the benefits and costs of a college education depends on the background traits of that individual. These traits include demographic characteristics and socioeconomic status, skills, abilities, and aptitudes, and initial attitudes and intentions.

Once a student enrolls, these characteristics interact with the environment to create the student's college experience. (See Figure 1.) The experience is based on both curricular and extracurricular activities. Here the model is similar to that of Stage and Hossler (2000), who also emphasize the importance of active student experiences or involvement. The appeal of the courses, difficulty of the coursework, and the ability of the student to complete the work in the time available all play a part. Skills, abilities, and aptitudes of the student are influential here. Having a parent who attended college can be helpful in providing a student with correct expectations about college life. Students with inadequate financial resources such as low family income may find it necessary to seek employment while in school. Time at a job reduces the time available to perform coursework and engage in extracurricular activities. Family responsibilities may also compete for the student's limited time. A shortage of time may raise the level of stress felt by the student and diminish the student's enjoyment of the college experience. Current costs, both monetary and non-monetary, may be high.

[FIGURE 1 OMITTED]

Like the work by Bean and Eaton (2000), the current model asserts that students' attitudes and intentions are molded by the college experience. The choices of major and career are influenced; these choices teed back into the college experience. Commitments to the institution and to education in general are also affected. Whether the student decides to quit school in response to high costs depends on whether expected future benefits are high enough to compensate. That depends on the magnitude of the current difficulties the individual is experiencing and on perceived future benefits.

Student attitudes and intentions coupled with initial background characteristics then have an impact on academic performance. That performance feeds back into attitudes and intentions. Background, attitudes and intention then simultaneously determine the performance and persistence of the student, with performance providing additional input into persistence behavior. The factors that affect persistence and were included as control variables in the analysis are listed in Table 1, along with the signs found in previous studies. A positive sign indicates that the variable was directly related to persistence; a negative sign indicates an inverse relation.

One of the attitudes that influence the student's persistence is the attitude toward future financial success as modified by the college experience. Suppose that a student considers it very important to be very well off financially; money is vital. But how does future money compare to current money? In other words, what is the discount rate? Consider a student with a high discount rate. This student values current money relative to future money so highly that he/she finds it difficult to wait to complete school to start earning that income. The prospect of higher earnings from a college degree may be insufficient enticement to keep the student in school when other pecuniary and nonpecuniary factors are taken into consideration. So at the first stumbling block in the road, the student quits school. If this student starts college at all (possibly at the prompting of parents), he/she has a low probability of persisting. Opportunity costs in the form of foregone earnings are even higher in periods of low unemployment. Therefore, the student is more likely to drop out then, contributing to the countercyclical pattern of college enrollment (Frances, 1990 and Clotfelter, 1991). On the other hand, consider a student with a low discount rate. This student finds the prospect of high future earnings attributable to a college education sufficient incentive to keep him/her in school. This student has a high probability of persisting.