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National Center for Public Policy and Higher Education Report Focuses on Borrowers Who Drop Out

May 5, 2005

Half of all students who enrolled in postsecondary education in 1995-96 borrowed for their education. However, according to a report released by the National Center for Public Policy and Higher Education, more than 20 percent of those borrowers were no longer enrolled and had not completed their programs in 2001. In other words, in 2001, more than 350,000 former freshmen who began college six years earlier were without a degree and had loan debt to repay.

Borrowers Who Drop Out: A Neglected Aspect of the College Student Loan Trend offers the first look at these students who left college and have loan debt, as well as the personal and economic consequences. The study also provides a comparative view of those students who borrowed but who completed their degrees. The study finds that borrowers who did not complete their postsecondary degrees have greater economic hardships compared with borrowers who completed their degrees. Those students who enrolled at four-year institutions and who dropped out before receiving a bachelor's degree were two times as likely to be unemployed than their degreed counterparts and more than 10 times as likely to default on their student loan.

The study also pays attention to the risk factors associated with dropping out, including delayed entry into postsecondary education, working while in college, academic preparation, first-generation status, low-income background, and others. Targeted programmatic and policy recommendations are offered.

The report can be downloaded from the National Center for Public Policy and Higher Education's website.