More than a fifth of students still drop out of university courses in England and Wales despite £800m spent tackling the problem, MPs have said.
The student population has increased by 25% since 1999
The public accounts committee said the drop-out rate of 22% was the same as in 2002 when it last covered the issue.
A growing number of students were from poorer backgrounds and were less likely to stay the course, the MPs said, but more had to be done to help them.
Ministers said UK university retention rates compared well internationally.
The committee found around 28,000 full-time and 87,000 part-time students who started first degree courses in 2004-05 were no longer in higher education a year later.
But the university umbrella group Universities UK said the figures also had to be seen against the backdrop of a 23% increase in students over the same period.
The committee says students drop out for a range reasons including physical or mental health problems, dissatisfaction with their course and financial problems.
They may find higher education was not right for them or face family pressure to quit.
Universities are now attracting around 31% of their students from non-traditional backgrounds, because of attempts to widen participation.
These are individuals whose parents work in non-professional and non-managerial jobs and may not have gone to university themselves.
But research shows these students are more likely to drop out and less confident about changing their courses.
However, there are wide variations between universities in the share of students who continue into a second year.
Russell Group universities, those that produce the most research, tend to have higher retention rates than others.
In 2004-05, five universities had a continuation rate of 97% for full-time first degree students, whereas 12 had continuation rates of below 87%.
INTERNATIONAL TERTIARY EDUCATION 'SURVIVAL' RATES
Complicated by wide variations in the type and duration of courses, and access requirements. Some example OECD figures:
Czech Republic 65%
United Kingdom 78%
United States 54%
The Higher Education Funding Council says there are valid explanations for these variations - mainly that different institutions have different types of students.
The funding council gives each university a retention target which takes into account the nature of the students who attend it.
But the MPs said the council should agree specific improvement plans with universities that have consistently low retention rates.
The committee also found that some students felt academic and pastoral support was limited and did not meet their needs.
Personal tutoring should be given a high priority, with tutors being given training for the role, it added.
It also said information on why students withdrew from courses was not reliable and often incomplete.
Committee chairman Edward Leigh said more students were being recruited from backgrounds and schools where university was not previously thought to be an option.
"But these are the very students who are more likely to leave early.
"Universities must get better at providing the kind of teaching and support services that students from under-represented groups need."
Higher Education Minister Bill Rammell said student retention rates in England compared well internationally.
A university education was open to more students than ever before and there were significant achievements in maintaining retention rates for students.
But he accepted that there was more to do and welcomed the committee's suggestions.
Professor Rick Trainor, the president of Universities UK, told the Today programme the report was overly gloomy.
"Obviously, universities would like to have more resource and if we had more resource we could do even more for these students," he said.
"But during the period that the select committee was looking at, the number of students went up by something like 25% and yet the graduation rate remained among the highest in the world.
"If you look at these graduation rates, a very good job has been done, considering the expansion in the system."
National Union of Students president Gemma Tumelty said it was not enough for poorer students to be encouraged to enter university - they had to be supported so that they could complete their courses.
University and College Union general secretary Sally Hunt said: "Just getting them through the doors does not represent success."
Shadow higher education minister Rob Wilson said: "Widening participation and improving retention rates must be priorities, but the government is currently wasting taxpayers' money while student debt is soaring."
Liberal Democrat universities spokesman Stephen Williams said more reliable information was needed on why students were dropping out.
"Particular attention will have to be paid to the effect of the huge financial pressures many students face," he added.