College Dropouts: Leaving College with Student Loans, but no Degree
Source: The Charlotte Observer
When the discussion of college debt is brought up, college dropouts with student loan debt are rarely mentioned.
College drop-outs are at high risk for defaulting on their student loans because they usually cannot access higher paying jobs without a bachelor’s degree. They are ensnared with thousands of dollars in student loan debt, but only being able to make lower wages. As a result, college dropouts are at high risk for being placed into default. 63% of borrowers that have had their loans placed into default are college dropouts.
In March of last year, Consumer Reports National Research Center released a report on students who left college with debt. This report surveyed 1,500 Americans that had left school with degrees, as well as those without. When asked about whether or not college was worth the cost, 45% said that it was not. Of this group, a majority of them had dropped out of college before they could finish their degree.
Why do students drop out of college? There are a handful of reasons for this. Money, academic, and family emergencies are some of the most common among college dropouts. The primary reason that leads students to dropping out is money. College tuition is rising. Even with federal financial aid, there are costs that students and their families cannot keep up with. Even middle class families cannot afford college anymore. Students who cannot afford to stay on top of their out-of-pocket payments are at risk for being kicked out of on-campus housing and have their registration status placed on hold, meaning that they cannot sign up for more classes until their outstanding balance is paid.
Other students lose hope in going to school. They may have racked up a lot of debt in just a short amount of time, so they end up dropping out in order to prevent more debt from accumulating. However, once a student leaves school, interest rates start stacking up and the amount of debt that they owe grows. Having student loan debt without a degree makes it financially strenuous for a student to return to school to finish their academic program.
Other reasons for students dropping out of college range from family emergencies to academic struggles. Academic struggles is one of the top reasons for students dropping out of college. Once a student’s GPA plummets below the university’s minimum GPA requirement, they are at risk for having their financial aid taken away, being put on financial probation, or being excused from the university.
Although the cost of higher education is expensive, it is better to finish getting a college degree than it is to drop-out with debt. Once the student has already begun to accumulate student loan debt, it is much safer to go through with the degree and finish college. With a degree, graduates have access to better paying jobs and opportunities for advancement. Some companies will even help an employee pay back their student loans. Even if a borrower graduates with a large amount of student loan debt, there are options available to them for student loan debt forgiveness, or enrolling in an income-based repayment program.
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