Education is the foundation of developed society. The country's education system is a part of the whole socio-economic system. The characteristics of the education system differ from country to country and are determined by cultural and historical features as well as policies and the state of the economy. The education system should be the basis of economic development. The quality of the education system affects the country's competitiveness. Higher education is a prerequisite for the development of knowledge –based society and long-term development. The share of higher education differs and is higher in developed countries. Despite this, the number of highly educated people in Croatia is increasing, but not much has been done in reducting the number of students who are dropping out. The country needs better policy measures in this area that will ensure greater competitiveness of students after they complete their studies. Student non-completion is most common in the first and second year of studies, and the consequences are unmotivated students entering the labor market with low expectations and self-confidence. Undeveloped awareness of the role of education and low expectations and distrust lead to uncompensated labor force. In order to improve the system, it is necessary to work on the factors determining the decision drop out, but also to increase the link between practical education in the education systems and the labour market. The reasons for studetn non-completion are different, but the most common are financial problems, lacking support of the family, mismatched attitudes about the educational system and trust, as well as the economic situation in the country.