Play now, pay later...
Every investment involves an element of risk, and borrowing to pay for college expenses is no exception. Borrowing remains a sound investment for most students, but many who borrow and then drop out appear to have lost the bet. Students who borrow money for college begin postsecondary education with more academic and financial risk than other groups. Some of these students, after borrowing and then dropping out of college, beat the odds and go on to productive careers. Perhaps their courses and experience help them succeed, even without a certificate or degree. Or perhaps they come from families sufficiently well off that the accumulated debt is not burdensome.Yet, along with those who do not finish high school and those who stop with a high school diploma, many college dropouts fall into what has been called "the forgotten half" of our nation's young adult population. The findings in this report, in providing a snapshot of students' experiences, suggest that many borrowers who drop out of postsecondary education may be left behind in the nation's economy.
The growing reliance on loans to finance rising college tuition has drawn widespread attention in the media and public policy debates. Much of the publicity and concern focuses on students who pursue a four-year degree and take on significant debt, averaging from $15,000 to $20,000 in debt by the time they graduate. Some college graduates have borrowed much larger amounts, and average debt burdens are especially high for low-income and minority students who complete their programs of study.2 However, most students who achieve their degrees reap sufficient economic benefits to pay off their loans.
For the first time, this study examines those who may be least well-served by our current system of financing higher education: students who invest in their own education by borrowing, but who do not complete their postsecondary programs. A recent report by the Education Trust warned that "hundreds of thousands of young people leave our higher education system unsuccessfully, burdened with large student loans that must be repaid, but without the benefit of the wages a college degree provides." This report examines the dimensions of this problem and identifies ways to address it.
Read: Borrowers who drop out.
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