Since Sri Lanka introduced open economy policies in 1977, industries and higher education have faced heightened competition. Despite fierce competition for state university admissions, only a few students are accepted even if they meet the qualifications. The rise of foreign degree-awarding institutions in Sri Lanka has led thousands of students to enroll there. However, there has been a noticeable increase in students abandoning their courses recently. Efforts by these institutions to address student retention have been insufficient due to an incomplete understanding of dropout causes. This study investigates the impact of teacher-student interaction and non-academic staff support on student retention, with institutional factors as mediators. The research, involving 360 out of 6,074 undergraduate students from Sri Lankan foreign degree-awarding institutions, used Structural Equation Modeling (SEM) to analyze the data. The findings reveal that teacher-student interaction and non-academic staff support positively influence institutional factors, affecting student retention. However, while teacher-student interaction significantly impacts student retention, non-academic staff support does not have a direct effect. Institutional factors mediate the relationship between both teacher-student interaction and non-academic staff support with student retention. The results provide valuable insights for improving student retention through targeted management actions.
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