Why more and more students are dropping out of college
Although the overall decline in college enrollments has leveled off, the number of students who entered college but then dropped out increased 3.6% in the 2020-21 academic year, according to the National Student Clearinghouse Research Center. More than 40 million students are currently exmatriculated.
“Increasing numbers of stopovers and fewer returning students have contributed to broader enrollment declines in recent years,” said Doug Shapiro, executive director of the National Student Clearinghouse Research Center.
According to a report by education bank Sallie Mae, most students who put their education on hold said it was because of a loss of motivation or a change in life. Others cite financial concerns followed by mental health issues.
“There are a variety of problems that students face in college, many of them unexpected,” said Rick Castellano, a spokesman for Sallie Mae. “In some cases, it could be an unpaid bill.”
Students with “any college” are more likely to default
If Biden’s plan to cut $400 billion in student loans is blocked, default rates could rise, the US Department of Education has warned.
But the borrowers most at risk of default are those who start college but never finish it.
“If you’re a college student who hasn’t graduated, you haven’t seen the benefits of that education, and it’s even harder to pay off the loan,” Castellano said.
The default rate among borrowers who leave with student debt but no degree is three times higher than the rate among borrowers who have a degree.
When a student defaults, it’s not only a loss for them, but also for the college and the federal government, Castellano added. “It’s a pivotal moment for all of these stakeholders.”
Forgiveness ‘really focuses on the back end’
Meanwhile, college is only getting more expensive. Tuition and fees plus room and board, books and other expenses for a four-year private college averaged $57,570 in the 2022-23 academic year; at four-year public colleges across the states it was more than $27,940, according to the College Board, which tracks trends in college pricing and student aid.
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Next year, some colleges said they will raise tuition even more, citing inflation and other pressures.
Still, many prospective students believe graduating is worthwhile and continue to take out loans to get through college.
“Regardless of where the Supreme Court ends up, forgiveness as a solution really focuses on the back end,” Castellano said. “It could absolutely help, but how do we make sure we’re not back in the same place in five years?”
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