Using data from the Department of Education’s College Scorecard, Third Way found that 761 of the 1,027 schools they surveyed had graduation rates of less than 67 percent.
Topping their list of “dropout factories” was Caribbean University-Ponce in Puerto Rico, where 80 percent students get Pell Grants but only 18.9 percent complete their studies within six years.
It was followed by Southwestern Christian University in Oklahoma, where 65.2 percent of students rely on federal grants and only 23.2 percent graduated.
“There is a high number of institutions that are not only failing to graduate a large subset of their students but appear to be targeting Pell students and charging them a lot of money in the process,” Third Way reported.
There were, however, exceptions. Spelman College in Georgia, a school where more than half the students get Pell Grants, had a graduation rate of 70 percent.
But in general, prestigious schools with much lower percentages of Pell Grant students like Columbia University in New York City, Wheaton College outside of Chicago, Smith College in Massachusetts, and Occidental in Los Angeles, tended to boast high graduation rates.
“Overall, our nation’s four-year private, non-profit schools have a long way to go to ensure that more students who enter college are able to leave with the diploma they need to successfully enter the workforce and pay off any student debts,” Third Way reported.
Third Way also found that a quarter of the students who managed to graduate from these private schools were behind on their student loan payments three years after getting their diplomas.
Among other things, Third Way recommends that private colleges with graduation rates of less than 67 percent be required to come with a plan to raise that percentage.
“A high school with a completion rate lower than 67 percent is considered a drop out factory under federal law, and those schools are required to intervene to turn their failures around,” the researchers wrote.
Also, colleges “should pay a portion of the cost of their federal student loan delinquencies.”
“By having skin in the game, college presidents will be encouraged to think more about outcomes of students, not just acceptances,” they wrote.
Currently, more than 43.3 million Americans are saddled with $1.23 trillion in student loan debt.
To alleviate the growing crisis, President Obama has proposed a plan to offer two free years of community college and Democratic presidential candidate Bernie Sanders said the U.S. should follow the lead of countries like Germany and eliminate tuition altogether at public universities.
The Third Way study did not look at big state schools like the University of Massachusetts Amherst or the University of Illinois, where lots of students also take out federal loans.
“We plan to do a follow-up report with similar metrics on the four-year public universities later this summer,” Third Way spokeswoman Ladan Ahmadi said.
The New York Times reported that the graduation rate at public universities is 46 percent.
This story originally appeared on NBCNews.com.