Suppose 3 million high school graduates start college each year. Those who earn a college degree will do so in four years. However, some students will drop out along the way. The first-year attrition rate is 20%, while the second and third-year attrition rates are 10% and 2.5% respectively.
(a) What is the distribution of college students by year in college? How many students graduate from college each year?
(b) Believing that education is the key to the future, a presidential candidate proposes that the federal government pay the first $3,000 of college expenses each year for everyone attending a four-year college. It is expected that this proposal will encourage 1 million more high school graduates to enroll in a four-year college each year. Of these 1 million new college students, the first, second, and third-year attrition rates are 40%, 20%, and 5%. Why is it likely that attrition rates will be higher among these groups of students?
(c) What is the yearly projected cost of the program in part (b)? What is the average cost of each new four-year college graduate?