Student Loan Delinquency Skyrockets Among Dropouts
There are countless programs in place to help high school students to make it to college, but what happens from there?
Data shows that the college dropout rate is on the rise in America. Pathways to Prosperity, a 2011 report from the Harvard Graduate School of Education, points out that just 56% of college students complete four-year degrees within six years. And according to the Organization for Economic Cooperation and Development, the US now has the highest college dropout rate in the industrialized world.
That’s bad news in itself, but even worse when you look at the number of college dropouts who leave with a pile of debt but no degree.
According to data from think tank Education Sector, 29% of college students who took out loans dropped out of school in 2009, versus 23% in 2001. It’s important to point out that much of that increase can be associated with the rise in for-profit four-year institutions, where the dropout out rate is much higher – 54% of borrowers dropped out of for-profit institutions in 2009. By comparison, just 19% of borrowers dropped out of four-year nonprofit institutions.
What happens to dropout borrowers?
It is much harder for college dropouts to find employment than it is for their college graduate counterparts. The Education Sector’s report shows that in 2009, the unemployment rate for borrowers who graduated from college was 15%, versus a whopping 25% for borrowers who dropped out.
It comes as no surprise that without jobs, paying down those loans becomes extremely difficult. Borrowers who dropped out were four times more likely to default on student loans than those who did graduate.
Why are students dropping out?
According to the U.S. Department of Education, only one quarter of American college students attend full-time at residential colleges, and 75% of American college students “are juggling some combination of families, jobs and school while commuting to class.”
Statistics show that graduation rates are especially low among part-time, low income and minority students.
One of the Obama administration’s 2020 goals is to boost the college graduation rate – but that’s still years away. In the meantime, there are several strategies that communities, institutions and students themselves can use to increase the likelihood of graduation.
Gain a better understanding of the non-traditional student
According to a report from Complete College America, in years past the government traditionally tracked only the progress of traditional, full-time first year college students. But many of today’s students do not fit this profile. In order to make informed policy and institutional decisions, College America suggests that the government need more data about today’s non-traditional student to back up their legislations and programs.
Offer online & night classes
For the 75% of students juggling families, jobs and commutes, the convenience of online and night classes can be the difference between completing course work and dropping out.
Provide opportunities for mentorship
Graduation rates are lower among minority and low-income students. Mentors who graduated while facing similar circumstances can offer advice and encouragement when times – financially, academically or socially – get tough.
Check potential schools’ dropout rates
Before signing on with a school, you can check that institution’s graduation rate by searching the College Completion tool from The Chronicle of Higher Education. A low graduation rate is not an automatic disqualifier, but it should raise questions about the level of support you may need.