I'm not claiming that the rates aren't much lower than on-campus completion rates, that seems quite reasonable, but my point is that it's useless to base any decisions of the official "dropout rates" since if the true rate is (as in your example) 25% then the 3% rate is quite literally fiction.

IMHO a good metric would be to simply ask people (probably on that first quiz) "What are your plans for working on this course?" where "I intend to finish the whole course" would be one option of many (and many people who answer at least one question right in the first quiz would honestly say that they never even intended to 'graduate') and then you'd get a reasonable completion rate by counting only those students.