One Dropout Costs Taxpayers an Estimated $750,000 Over a Lifetime

The Center for Cost-Benefit Studies of Education reports that an estimated 6.7 million youths are not in school or the labor force, costing taxpayers approximately $750,000 over a lifetime.

During Monday’s State of the Union address, President Obama declared that he wants all American children to stay in school until at least age 18. Now a new study is highlighting why he would make such an assertion, and just how bad dropout rates are.

According to the report prepared for the White House by the Center for Cost-Benefit Studies of Education, an estimated 6.7 million youth between the age of 16 and 24 are not in school or the labor force.

In an interview with CNBC, professor Henry Levin of the Teachers College at Columbia University calls the group “Opportunity Youth” and says they comprise approximately 17 percent of the youth population in the U.S.

The lifetime cost that taxpayers pay for only one “Opportunity Youth” member is an estimated $750,000. Additionally, the combined social burden, including the burden on tax payers, is nearly $5 trillion dollars in losses.

With intervention, Levin says dropout-prone students can be helped.

“We see interventions in schools. There are ways to improve the education of these kids and to get more of them to graduate and be college ready,” Levin tells CNBC.

The report sites some of the following as ways to reduce dropout rates:

• Commit to early childhood education

• Attract a more talented teacher workforce

•  Reduce class size where needed

• Implement powerful high school reforms

“We have data from studies that show if you intervene early, you get very good results in schools,” Levin says.

According to the National Center for Education Statistics, the dropout rate for African-Americans declined from 19 percent in 1980 to 9 percent in 2009. The rate is still relatively high when compared to whites (5 percent.) When comparing whites to Latinos, the dropout is especially high, with Latinos exceeding a 17 percent dropout rate for youth aged 16 through 24.  

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