What could be worse than owing tens of thousands of dollars in college student loans? College dropout debt. That meansowing tens of thousands in loans, with no degree to show for your time and money?
Pulitzer Prize-winner David Leonhardt, Sahil Chinoy, and the Urban Institute researched college graduation rates. In May 2019, they published an interactive infographic of their distressing findings. Colleges with the highest dropout rates include the University of Nebraska-Omaha, the University of Nevada- Las Vegas, and multiple schools in Texas, Oklahoma, Arkansas, Louisiana, and Indiana.
The College Dropout Dilemma
Among students at four-year colleges, two of every five do NOT complete their college degree.According to the National Student Clearinghouse, the six-year graduation rate is only 62% for all students seeking bachelor’s degrees. This six-year graduation figure increases to 71% at private schools and is slightly more at highly selective schools. 
Almost 40% of students who take out loans don’t graduate and are three times more likely to default, earn less lifetime income, and are more likely to be unemployed– than borrowers who do graduate—according to a 2016 federal report.
Avoid Becoming a Degree-less Debtor
Research graduation rates
For colleges that interest you, check the graduation rates. High graduation rates indicate solid student support—not just scholarships and financial aid, but sufficient course offerings, academic advising, counseling, and engagement, to improve your chances of success. The U.S. Department of Education College Scorecard helps you compare schools on multiple factors including graduation rates.
Consider more selective schools.
Many students assume they won’t be admitted or can’t afford more selective colleges. According to a Georgetown University analysis, students with above-average test scores have higher success rates at schools with selective admissions than they do at colleges with open admissions.
Maximize high school academics.
Take all the courses you can to fulfill college requirements. Don’t enter college with deficiencies in math or world language courses that you could have completed in high school. Use Advanced Placement, credit by examination, dual enrollment, etc. to get a jump start on college coursework. Graduating on time, in four years instead of six, saves not only college costs but reduces accrued loan interest and gets you earning income faster
Be prepared.
Of 15.9 million undergraduate students enrolled in 2020, 24% dropped out before their second year. College requires adjustments—being responsible for your own meals, laundry, time management, and all your choices. Practice the life skills you’ll need before arriving on campus.
Find your best-fit college at the lowest cost.
Find the college that is the best match for you. You’ll be happier, more engaged, and more successful at college if you choose what’s right for you. Apply to at least seven four-year colleges and compare financial aid packages. Make the schools compete for you!
Boost your ACT/SAT scores.
Prepare well and take the test at least four times to maximize your score and your scholarship dollars. Test Day is Pay Day. Work to increase your scores to earn scholarships and reduce your college costs.
Work hard to research and prepare so you can avoid college dropout debt and instead become a college graduate with minimal debt.
FAQs
Do I Have To Pay Back My Student Loans If I Drop Out of School? Regulations dictate that if you leave college or drop below half-time enrollment, you have to start paying back your federal student loans. You may have a grace period (generally, six months) before your first payment is due.
What is the truth about the college student debt crisis? ›
As you can see below, the average student debt by state is only about $40,000 or less. However, more than 2.6 million borrowers have an average student debt greater than $100,000. And to top it all off, 14.4 million borrowers aged 35-49 have a staggering total of $622 billion in US student debt.
How many people drop out of college because of student debt? ›
51.04% of students drop out because they cannot pay for college (What to Become, 2021). Moreover, 55% of students struggle to financially support their education, which results in 79% of them delaying their graduation (ThinkImpact, 2021).
How many people have debt but no degree? ›
Really, really bad. Approximately one in six college students end up with debt but no degree, and a whopping 40 percent of all borrowers do.
Can you get student loan forgiveness if you didn t graduate? ›
The Department of Education offers several student loan forgiveness programs. You may qualify for these programs even if you didn't graduate. The most popular and widely known forgiveness program is the Public Service Loan Forgiveness program, better known by its acronym PSLF.
Do college dropouts get loan forgiveness? ›
Your loans can't be canceled or forgiven because you didn't get the education you expected or you couldn't finish your degree program. However, you might be eligible for other programs, such as Public Service Loan Forgiveness (PSLF), if you work for a qualifying employer—even if you didn't graduate from college.
How to fix the college debt crisis? ›
Reducing interest rates on federal student loans could make repayment more manageable for borrowers. This policy change could help lower the overall cost of education and prevent the ballooning of loan balances. Addressing the root cause of the crisis involves finding ways to make higher education more affordable.
How bad is college debt really? ›
Key Takeaways. Carrying student debt can affect your ability to buy a home if your debt-to-income ratio is too high. If you have too much student loan debt, you won't be able to save as much for retirement. Student loan debt can lower your credit score, especially if you fail to make on-time payments.
Why is student debt considered a crisis? ›
It's the result of a decades-long explosion in borrowing coupled with soaring education costs. The Federal Reserve data shows people under the age of 30 are more likely to have student loan debt compared with older adults – underscoring the crippling burden on another generation of Americans.
Should I quit college if I can't afford it? ›
If going to college doesn't align with your current financial reality, there are several options available, including pursuing lower cost credentials or heading straight into the workforce. The best next step for you will depend on your current priorities and long-term career goals.
College dropouts make an average of 35% less income than bachelor's degree holders. College dropouts are 20% more likely to be unemployed than any degree holder.
Is college degree worth it 2024? ›
On top of that, job security is higher, as the unemployment rate for those with a bachelor's degree is under 2.5%. Career Advancement. The more marketable skills you have, the more opportunities you'll have to advance in your career. Some of the highest-paying jobs require a bachelor's degree.
Who does student debt affect the most? ›
The least wealthy Americans are most likely to hold student loan debt — and more of it. 36.0% of families in the bottom quartile of net worth owe a median of $32,000 in student loan debt. Meanwhile, 5.7% of families in the top 10% owe student debt, at a median of $20,000.
How does student debt affect the economy? ›
Student loan debt can prevent you from making major purchases like a home or a car. An economy may see fewer new businesses when there is more student loan debt. Student loan debt also limits consumer spending. Economic recovery can be more difficult when there are many people carrying student loan debt.
Who owns student debt? ›
Federal student loans are owned by the U.S. Department of Education while private student loans are owned by the financial institution that granted them.
Do I owe fafsa money if I drop out? ›
Federal financial aid regulation states that if you withdraw from all of your classes or cease enrollment prior to the 60 percent point of instruction in any term, you will be required to repay all unearned financial aid funds received. A calculation will be performed to determine the repayment amount.
What happens if you dropout of college? ›
Dropping out may mean you must pay back some or all the scholarship money or federal student aid you've received, so check the requirements carefully. You will have to explain your decision. Figuring out how to tell your parents or loved ones you dropped out of college can be tricky.
How can I get out of college without debt? ›
17 Ways to Go to College Debt-Free
- Attend a Public School as an In-State Student. ...
- Attend Community College. ...
- Attend Online College. ...
- Attend a No-Loan College. ...
- Save With a 529 Plan. ...
- Earn Scholarships. ...
- Earn Grants. ...
- Participate in a Work-Study Program.
College credits don't necessarily expire, but depending on how long it's been since you've taken the classes, they might become ineligible to use toward a degree. There're some general rules at schools that you should be aware of when it comes to the lifetime of your classes.
