Students in the United States have collected nearly $1 trillion in education loans and a new study claims that nearly 30 percent of college students who took those loans later dropped out of school, up from 25 percent of student loan receiving dropouts just one decade earlier.
The study conducted by think tank Education Sector also found that students who drop out of college are most likely to default on their loans, in some cases by four times the default rate of college graduates.Jack Remondi, chief operating officer at Sallie Mae tells the Washington Post:
“They have the economic burden of the debt but they do not get the benefit of higher income and higher levels of employment that one gets with a college degree.” While adding, “Access and success are not linking up.”
To better prepare students for a college future the Obama administration is attempting to raise the college graduation rates for universities, ensuring that they give their students the tools they need to form a clear plan for their future.
According to the Consumer Financial Protection Bureau as the economy remains stagnant many students in college, faced with the prospects of not finding a job when they graduate have chosen to drop out rather than face an increasing amount of student loans. In many cases students are trying to balance full or part-time jobs with their college work to avoid higher debts, a scenario that often delays graduation times while decreasing the chance of finishing a degree program.
In a 2009 study by Public Agenda more than 50 percent of dropouts said work played a major role in their decision to leave college.
In the meantime college dropouts still earn more than high school diploma carrying workers but they still earn nearly $1 million less in their lifetime than the average college diploma carrying worker.