[Excerpt] Students transferring between institutions of higher learning are an important part of the higher education system. Recent work estimates, using a sample of students who began postsecondary education in the fall of 1989, that approximately one in three students transfer to another institution within 5 years (McCormick and Carroll, 1997). Despite the importance of the transfer route in higher education, very little is known about why four-year institutions enroll transfer students and which institutional characteristics are associated with a large transfer student share.
This lack of knowledge is troubling for three reasons. First, this knowledge is required to predict transfer students’ access to certain institutions, which in turn helps determine the potential benefit of the transfer route for a student. Second, a better understanding of the determinants of transfer enrollment provides insights into general differences in enrollment policies across institutions and over time. One would expect differences in enrollment management between public and private institutions, between research universities and liberal arts colleges, and between selective and non-selective institutions. In addition, one might expect overall enrollments as well as differences across institutional types to change over time as tuition levels and other factors vary.
The final reason why it is important to understand the determinants of an institution’s transfer enrollment share is that such knowledge provides insights into the degree to which institutions of higher learning profit from the characteristics of transfers. As discussed in the next section of this paper, transfer students can potentially benefit institutions in numerous ways such as reducing the inefficiencies created by high attrition rates or departmental enrollment imbalances. These productivity gains are important to both individual institutions and state systems of higher education with the latter entities especially able to realize these benefits because they can partially control the supply of transfer students.