Grade retention is a common practice used when students fail to meet required benchmarks. Therefore, it is important that we understand the relative benefits and costs associated with students repeating a grade. In this article we analyze the costs and benefits of grade retention. In our examination of retention, we obtain our calculations of the costs and benefits under a variety of assumptions and detail a broad spectrum of estimates. An assortment of potential economic and psychological consequences are linked with holding a student back. Here we focus exclusively on the economic consequences of retention, building a framework for analyzing the societal implications of retention. Using this framework, we present broad estimates of what the benefits of grade retention would have to be in order to make it a cost-effective practice. (Contains 12 footnotes.)