Free textbooks have been introduced in rural Ethiopian education to reduce financial barriers for students, but their impact on dropout rates remains under scrutiny. The research employs a qualitative approach involving participant observation, semi-structured interviews with educators and students, and document analysis focusing on school records and policy documents. A significant theme emerging from the study is that free textbooks have improved student access to educational resources, particularly for those who previously lacked funds. However, dropout rates did not show a uniform decrease across all schools or grades. While free textbooks offer potential benefits, their impact on reducing rural dropout rates in Ethiopia requires further nuanced understanding of local contexts and additional policy interventions. Future research should consider the variability within Ethiopian education systems and explore how other educational policies might interact with the effect of free textbooks.