New Survey Finds Student Withdrawals Are a Growing and Costly Challenge for Colleges

Institutions increasingly understand why students withdraw, but many are still figuring out how to protect students and manage the financial impact.

PHOENIX, Oct. 08, 2026 (GLOBE NEWSWIRE) -- GradGuard, whose mission is to help schools educate and protect students from the risks of college life, released findings from a new national survey conducted in partnership with Higher Ed Dive’s Studio ID. The report, “The Hidden Cost of Student Withdrawals: Trends, Risks, and Smarter Approaches to Protecting Enrollment Revenue,” based on a survey of 151 higher education finance executives across financial aid, bursar, and student finance services departments, found that institutions largely understand where they are losing students and revenue, but few have closed the gap between that awareness and action. 

Key findings:

• 85% of institutions report that between 5% and 20% of their student population withdraws each year. For a mid-sized institution enrolling 10,000 students, that translates to 500 to 2,000 withdrawals annually. 
• 41% of institutions report individual refund costs of $7,500 or more per withdrawal. 
• 73% of withdrawals occur during a student’s first year.
• 71% of institutions say managing refund appeals has become a growing administrative burden, requiring more effort than it did three years ago. 

“This research confirms what we’ve long seen in our work with schools,” said John Fees, co-founder and CEO of GradGuard. “Withdrawals follow predictable patterns that institutions can plan for. The data shows institutions already know when students are most at risk of leaving and why. The opportunity now is to close the gap between that knowledge and what students actually experience when an unexpected health event or crisis hits.” 

The report also highlights how institutions that embed tuition protection directly into the enrollment and billing processes are seeing measurable results. At St. Edward’s University in Austin, Texas, the shift to an embedded tuition protection model has meant retaining more than $1 million annually that previously went out the door to refunds, while dramatically reducing the volume of refund appeals the university handles each year.  

“We can help students see withdrawal as a pause, not a stop,” said Kelsey McClure, assistant director of student accounts at St. Edward’s University. “Students don’t plan for the unexpected, but institutions have to. Embedding tuition insurance is an incredibly simple way to solve a very complex, taxing problem.”

“Embedding tuition protection into the enrollment process, rather than leaving it as something a family has to find on their own, is what turns a refund policy on paper into a policy that actually reaches students,” Fees added. “That’s the model schools like St. Edward’s are proving out, and it’s why we built our platform around it.” 

GradGuard works with more than 700 partner institutions nationwide to embed tuition insurance and renters insurance directly into the enrollment process, helping schools protect both students and institutional revenue from unexpected financial losses. 

The full report is available at hub.gradguard.com/studentwithdrawals2026.

Attachment

• The Hidden Cost Behind Student Withdrawals

Natalie Hubertus
GradGuard
602-341-5947
nhubertus@gradguard.com