Student dropout in distance learning remains a critical challenge, with profound societal and economic consequences. While classical machine learning models leverage structured socio-demographic and behavioral data, they often fail to capture the nuanced emotional and contextual factors embedded in unstructured student interactions. This paper introduces a transformative AI framework that redefines dropout prediction through three synergistic innovations: Retrieval-Augmented Generation (RAG) for domain-specific sentiment analysis, prompt engineering to decode academic stressors,and cross-modal attention fusion to dynamically align textual, behavioral, and socio-demographic insights. By grounding sentiment analysis in a curated knowledge base of pedagogical content, our RAG-enhanced BERT model interprets student comments with unprecedented contextual relevance, while optimized prompts isolate indicators of academic distress (e.g., "isolation," "workload anxiety"). A cross-modal attention layer then fuses these insights with temporal engagement patterns, creating holistic risk pro-files. Evaluated on a longitudinal dataset of 4 423 students, the framework achieves 89% accuracy and an F1-score of 0.88, outperforming conventional models by 7% and reducing false negatives by 21%. Beyond prediction, the system generates interpretable interventions by retrieving contextually aligned strategies (e.g., mentorship programs for isolated learners). This work bridges the gap between predictive analytics and actionable pedagogy, offering a scalable solution to mitigate dropout risks in global education systems