College dropouts have debt but no degree
As the nation amasses more than $1 trillion in student loans, education
experts say a vexing new problem has emerged: A growing number of young people
have a mountain of debt but no degree to show for it.
Nearly 30 percent of college students who took out loans dropped out of
school, up from fewer than a quarter of students a decade ago, according to a
recent analysis of government data by think tank Education
Sector. College dropouts are also among the most likely to default on their
loans, falling behind at a rate four times that of graduates.
That is raising new questions about the wisdom of decades of public policy
that focused on increasing access to higher learning but paid less attention to
what happens once students arrive on campus. And some education experts have
begun to argue that starting college — and going into debt to pay for it —
without a clear plan for a diploma is a recipe for disaster.
gThey 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,h said Jack Remondi, chief operating officer at Sallie Mae, the nationfs
largest private student lender. gAccess and success are not linking up.h
The Obama administration says it is trying to address the
issue by coupling its goal of ensuring that high school students are prepared
for at least one year of higher education with new targets for college
graduation rates.
The plight of gnon-completersh has grown in magnitude as student debt tops $1 trillion, according to the Consumer
Financial Protection Bureau. In addition, the sputtering economy has forced a
growing number of students to make difficult choices between the benefits of a
degree and the burden of paying for it. More students are balancing their
studies with full- or part-time jobs or signing up for a reduced course load to
save money, increasing the likelihood that they will not graduate.
According to a 2009 study by Public Agenda, half of college dropouts said
work was a major factor in their decision. Only a quarter said they had spent
too much time socializing.
eMoney and timef
gIn the end, itfs about money and time,h said Anthony Carne-vale, director of
the Center on Education and the Workforce at Georgetown University. gTherefs
almost a synergy between the two that will knock you out of school.h
The cost to the economy is roughly half a trillion dollars, he said. Although
college dropouts make more than those with only a high school diploma, he said
they earn about a million dollars less than college graduates over their
careers.
Malainie Smith spent a year at a small liberal-arts college in Massachusetts
before deciding to go to nursing school. She was halfway through her program at
Simmons College in Boston when she took what she thought would be a break of one
semester. When she tried to return, she found she could no longer get a loan.
Smith said that left her in a Catch-22 situation. She had to quit school but
still owed about $100,000 to the Vermont Student Assistance Corp. (VSAC), a
public nonprofit student lender. Her monthly payments are about $400. Three
years after she left Simmons, she is now a waitress — a recent promotion from
her position as a hostess.
gIfm not getting high-end-
paying jobs,h Smith said.
gTherefs more potential than this.h
Scott Giles, a vice president at VSAC, said he could not discuss the details
of Smithfs situation, citing privacy reasons. But he said the lender often uses
the flexibility of its status as a public nonprofit to accommodate students in
need.
gWe want all of these people to not only get into school but actually
complete,h he said. gWe bend over backwards to try and make sure that thatfs
possible.h
Still, Giles said part of his organizationfs mission is to ensure that
students have the chance to go to college, even though it knows that some of
them will never finish. The benefits may take a generation to play out, he said:
Students whose parents attended at least some college are more likely to enroll
themselves, according to his groupfs research.
gThere are ways in which the access agenda and the completion agenda are at
odds,h he said. gFolks have defined failure to obtain a degree as just that —
failure. But that doesnft necessarily mean that the resources you put into that
student up to that point were wasted.h
Burgeoning for-profit sector
College enrollment has swelled by 38 percent during the past decade to more
than 20 million, according to government data. But lawmakers and regulators have begun
casting a wary eye on the burgeoning market of for-profit institutions with low
graduation rates and high student debt loads.
According to Mark Kantro-witz, a student loan expert and founder of
FinAid.org, students who receive a bachelorfs degree from a for-profit college
will have an average debt of more than $41,000. Students graduating from public
universities are expected to have roughly half that debt.
Not only do their students amass more debt, but for-profit colleges also saw
the biggest jump in borrowers who drop out, although every type of institution
saw increases. A study by the Education Trust found that more than half of
students who take out loans to enroll in two-year for-profit colleges never
finish. At traditional nonprofit and public schools, the percentage of students
with loans who started college in 2003 and dropped out within six years is about
20 percent.
By comparison, about 8 percent of Americans between the ages of 16 and
24 donft have a high school degree, according to government data.
gAs college became a mass institution in America, it started looking like
high school. But unlike high school, we didnft build a system that was designed
to keep people in,h Carnevale said. gIf we had a 40 percent dropout rate in high
school, wefd think we were in a national crisis.h
(The Post Co. owns the for-profit education company Kaplan, Inc., which provides more than
half of the parent companyfs revenue.)
The Obama administration said it has made increasing the college graduation
rate by 2020 one of its top educational priorities. Some schools have also tried
to streamline majors and course offerings to help ensure students stay on track.
Education experts say that many students are not prepared for the more rigorous
course work in college, and that many schools do not offer enough guidance for
young people trying to navigate the first steps of their adult lives. As a
result, students may not see the payoff in finishing college.
Marian Castelli of Connecticut said her daughter dropped out of the
University of Hartford after one year, in part because she was racking up more
debt than she thought she could afford. Her daughter studied dance performance
and was on the deanfs list but suffered multiple injuries. And with tuition of
$20,000 a year, every day mattered.
Castelli said she recalled her daughter telling her, gI donft think I want to
go back to college. I donft know how Ifd ever pay off $80k in debt with a
four-year degree.h
Castelli responded, gI couldnft argue with that.h
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