The budgetary difficulties of the federal institutions of education in Brazil require studies that seek to understand the dynamics of the spending process and the financing of these expenditures. This study sought to understand the financing process, especially the effects of dropout and retention on it, since the apportionment of resources destined to universities is based on the equivalent student indicator and this indicator depends on the number of graduates. The funding is based on the equivalent student indicator, which considers the number of graduates and the percentage of retained students. The latter is based on values standardized by course areas and it does not reflect the peculiarities of the courses in terms of geographical location and social aspects. Thus, the dropout, retention and funding ratio (ratio of the number of students equivalent to the student stock) were analyzed from a regression model using the micro-data from the census of higher education from 2012 to 2016, published by Inep. On the positive side, the results showed that dropout and retention are reduced and the funding ratio increases with the participation of students in vacancy reservation programs. On the negative side, evening courses contribute to increased dropout and retention and a decrease in the funding ratio. There are variations of the results for regions, years and weight of the group in which the courses are located, according to the Andifes table. When the results are observed in the set, the North Region presents the worst results and the 4,5 group weight courses, such as Medicine and Dentistry, presented the lowest rates of dropout and retention. It was also confirmed that the increase in dropout and retention reduces the funding ratio.
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