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More must be done to tackle a steady rise in the number of students dropping out of universities in England, the Social Market Foundation (SMF) says.

The national drop-out rate rose from 6.6% in 2011-12 to 7.4% in 2014-15, an SMF report finds, with each dropout representing "a loss of potential".

Out of all the regions in England, London performs the worst, with a drop-out rate of 9.3% in 2014-15.

The government said new laws would make universities publish drop-out rates.

The SMF study notes that many of the disadvantaged groups targeted through widening access programmes are also the groups most likely to drop out.

It says institutions with a higher in-take of black students, students whose parents work in lower level occupations or students who come from low university participation areas are more likely to have higher drop-out rates.

Statistics released by the Office for Fair Access in June showed that, in 2014-15, 8.8% of young, full-time, disadvantaged undergraduates did not continue their studies beyond the first year - up from 8.2% the year before.

The SMF says it is "futile to direct significant efforts to widen participation if the same students subsequently drop out".

"Tackling non-continuation at university is vital," the report says.

"Each dropout represents a loss of potential, a poor and probably confidence-sapping experience for a student and an investment in tuition costs which is likely to have a low return."

The research shows the South West has the lowest drop-out rate, while London has the highest:

Greater London 9.3%

North West 8.5%

Eastern 8.4%

East Midlands 5.8%

Yorkshire and Humberside 7%

West Midlands 7.7%

North East 6.9%

South East 6.0%

South West 5.7%

The report says: "While [London] has successful schools and sends a high proportion of its population on to higher education, these successes are not always being translated into attainment at university.

"London's relatively poor performance in university retention is part of this story. It is one that needs to be rectified.

"While young people in London are more likely than similar individuals in other regions to attend university, drop-out rates are also higher."

The report suggests the cost of living may be a factor, as well as the fact that London has the highest proportion of students living at home (31%).

"It is possible that distance and staying at home during their studies is influencing their individual sense of belonging.

"Students are less likely to feel a full sense of belonging to their university life if they remain connected, both mentally and physically, to their home environment."

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SMF research director and author of the report Nigel Keohane said: "The government, the Office for Students and universities themselves should now focus as much on retention as on widening the pool of applications and enrolments.

Dr Paul Marshall, who chairs the Board of Trustees at the UPP Foundation, which funded the research, said: "Like other industries, UK higher education cannot be complacent and needs to keep improving to remain a world leading sector.

"The UPP Foundation sees the task of tackling non-continuation as an important element to improving social mobility throughout HE."

A spokeswoman for the Department for Education said: "More students from disadvantaged backgrounds are going to and staying at university than ever before, but we know there is more work to do.

"The Higher Education and Research Act will go further by requiring all providers - including the most selective - to publish application, drop-out and attainment data by gender, ethnicity and socio-economic background.

"This will hold universities to account and help students to make informed choices about where they go to study.

"The Teaching Excellence Framework is also refocusing the sector's attention on teaching - putting in place incentives that will raise standards and encourage providers to support students throughout their studies and equip the next generation of graduates for success."