Getting a college degree — and a job after graduating — is well worth juggling some college debt for many people. But you’re guaranteed to end up with nothing but regrets if you’ve got debt but no degree.
About 45% of people who are no longer in college and have student loan debt said that college was not worth the cost, according to a survey from the Consumer Reports National Research Center. About 1,500 Americans responded to the national survey in March.
Consumer Reports partnered with the Center for Investigative Reporting to examine student loans and a social media campaign dubbed #mydebtcouldbuy is part of the discussion.
What’s interesting is that those with second thoughts likely didn’t finish school; the survey noted that about 38% of that group upset about their debt didn’t graduate.
Committing to finishing strong and obtaining a college degree, it appears, would lead to a much happier financial picture.
“We don’t have a student debt problem, so much as a college completion problem,” said Mark Kantrowitz, publisher and vice president of strategy for Cappex.com.
“Students who drop out of college are four times more likely to default on their student loans than students who graduate, representing 63% of the defaults.”
Why do some drop out? Money … maybe they didn’t realize the full cost. Lack of academic or financial support. Conflicts at home or work.
Kantrowitz noted that the majority of dropouts at some schools take place during the first year or between the first and second years. It can help some students to seek out mentors and advisers earlier in the game; and budget before you borrow.
Debt horror stories
The six-digit horror stories involving student debt abound once again. The August cover of Consumer Reports is a bright, bold red with the headline: “I kind of ruined my life by going to college.”
The quote is attributed to a 32-year-old woman from Portland, Ore., who has $152,000 in student debt.
The troubling thing about only reading such headlines — and the article does include some practical tips for managing college debt — is that one might think that all college debt is a bad idea. It’s not.
On average, college grads in the Class of 2016 have a record level of about $37,000 in student loan debt for those with a bachelor’s degree. That’s up about 6% from last year, according to Kantrowitz’s calculations. About 71% of those graduating will do so with some student loans.
About 20% of the cost of college is covered by taking on college debt by parents and students, according to the “How America Pays for College 2016” report released by Sallie Mae this week. The survey indicated that 13% all college costs are covered with student debt; 7% with loans taken on by parents.
The top two sources of money: About 34% of the cost was covered by scholarships and grants, and 29% was covered by parent income and savings.
Source: USA Today | Susan Tompor, Detroit Free Press