I would belive with the fact that drop out rate is higher for students living off campus because in campus they get many perks that they won't at home. Students living on campus have eachothers moral and support and they won't have to worry alot about adjusting things as far a time is concern.
Yes, the drop out rate is higher for students living off campus, because students off campus do not have as many ways to get involved in school. Living in a dorm, a student has to meet other people, and will feel connected to what is happening at school. Living off campus, a student might be isolated and give up.