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I'm not sure about dropout rates for nonaffulent students; but I'm not sure the connection is as solid you're assuming.
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I just don't think people change. Assuming your claim is correct, then poorer kids do worse in school than rich kids. If that is the case through high school, then I suspect that will remain through college. Hence, a higher dropout rate.
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You have to re-apply every year, so the funds will always be available.
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I don't see what that has to do with anything. We don't continue to fund after they drop out? I agree. But the purpose of funding a person's education is so that they will graduate and be beneficial to the group. It is a selfish endeavor. Society funds a person and in return, society gets an educated person whose benefits to society far outweigh his drain on the society. So if a person goes just one semester and drops out, then that amount of money say $3,000 is wasted. If he never receives another check, the $3,000 is still wasted.
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I think you're right on the first part, but I think you're going to wind up shortchanging the people who need the help the most.
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The time to help them is early in their life. By the time they are old enough for college, they should help their self by working hard and be rewarded for it. Just throwing money at them is not going to help them. It will just waste the money.
Just a related thought, I never questioned and still don't have a doubt that poorer kids do worse in school than richer kids. I am sure that additional funding could very likely help some of the schools in poorer areas. Particularly in cities. But I went to a small, rural school. 150 in my graduating class. The same thing applied. The poorer kids did far worse than the middle class or richer kids. Far worse. And the school was small enough, that these poorer kids sat right along side the rest of us and received the same education. Additional funding would not have helped them. So that leaves me with a question. Is just making a statement to the effect that we need to increase funding for the schools in poorer areas really an appropriate answer to the problem?