SPENDING WHERE IT MATTERS: EXPLORING THE RELATIONSHIP BETWEEN INSTITUTIONAL EXPENDITURES AND STUDENT RETENTION RATES AT THE CALIFORNIA STATE UNIVERSITY

• Main Author: FARRE, MATIAS
• Format: Others
• Published: CSUSB ScholarWorks 2019
• Subjects: Institutional Expenditures; Retention Rates; Panel Analysis; Cluster Analysis; Econometrics; Educational Leadership
• Online Access: https://scholarworks.lib.csusb.edu/etd/802; https://scholarworks.lib.csusb.edu/cgi/viewcontent.cgi?article=1888&context=etd

It is anticipated that there will be a shortage of 1.1 million college-educated workers in California by 2030 (Johnson, Bohn, & Cuellar Mejia, 2016). Within this context, the California State University (CSU) is the principal source of skilled workers in the state, producing more career-ready candidates than any other single institution (“California State University 2018 Fact Book“, n.d.). This study examined the relationship between student retention rates and institutional expenditures across the different functional categories of instruction, student services, academic support, and instructional support at the CSU. With the exception of student grants and scholarships, these selected expenditures represent the system’s four largest individual expense categories. This study also sought to reveal the existence of similarities between institutions across the CSU based on institutional characteristics that emerged from the literature as predictors of student success including faculty composition, socioeconomic status of student population, and institutional selectivity (Bailey, Calcagno, Jenkins, Kienzl, & Leinbach, 2005; Ehrenberg & Zhang, 2005a, 2005b; Gansemer-Topf & Schuh (2006); Terenzini, Cabrera, & Bernal, 2001; Titus, 2006b). The sample utilized in this study is the entire population of the CSU, which is comprised of 23 campuses. Data for this study were drawn from the IPEDS database, managed by the National Center for Education Statistics (NCES). This quantitative, non-experimental, correlational study used panel data analysis to determine if the selected institutional expenditures influence retention rates and also to examine the extent to which institutional expenditures contribute to the prediction of retention rate. Multidimensional Scaling (MDS) cluster analysis was performed for exploratory purposes and to reveal groups with similar institutional characteristics. This study found that instructional, academic support, and institutional support expenditures were positively correlated with student retention rates. This finding suggests that increases in both dollar amounts and proportion of expenditures allocated to each functional category would result in higher retention rates. However, there was an exception: student services expenditures were found to be negatively correlated with student retentions rates, implying that allocating funds to student services activities would not result in higher student retention. This study also found that the CSU institutions can be grouped in six different clusters based on similarities of institutional characteristics, suggesting that the criteria to allocate funds from the CSU system to individual campuses should account for these differences to effectively support student success.