Students Who Don’t Complete College Hold More Debt Now Than Originally Borrowed: Report
Credit: Jemal Countess / Getty Images / People's Rally to Cancel Student Debt- Earning a degree tends to impact a student’s earnings post-graduation.
- That means borrowers who didn’t complete their college education have a harder time paying off their student loans.
- This group of borrowers is often overlooked during discussions about the debt crisis.
- Differences in debt four years later are most stark for those who attended private, nonprofit institutions.
A borrower’s ability to pay off their student loans correlates to whether they earned their college degree, a new report found.
Student loan debt promises to remain a hot-button issue in 2024. A new report commissioned by the National Association of Student Financial Aid Administrators (NASFAA) and authored by the HEA Group found that college non-completers are contributing significantly to the debt crisis.
Using College Scorecard data, the report found that those who did not complete college collectively owe $918 million more than they borrowed in the first place.
This stands in stark contrast to those who did earn a degree.
Non-completers now cumulatively owe 6% more than they originally borrowed, according to the report. Meanwhile, those who completed their college program owe 6% less than they originally borrowed.
The report suggests this disconnect may be because when a college student borrows through the loan system but doesn’t earn a degree, they don’t reap the benefits a degree may bring. They are left holding the bag for the cost of their education but without the salary bump someone who earned their degree might expect.
“If these borrowers now owe more than they initially borrowed, it may indicate that they earn too little to keep up with accumulating interest on their federal loans,” the report states.
The HEA Group used borrowing levels from 2013-15 and compared that to what was owed four years later, according to the report.
The report shows that the difference between completers and non-completers isn’t uniform across program lengths.
For example, while there is a stark difference between what non-completers and completers who attended four-year institutions owed four years after initially borrowing, that difference is less apparent for those who attended a two-year or certificate program.
Completers’ debt hasn’t grown as much as non-completers’ debt at two-year institutions, but both groups now owe more than they originally borrowed.
| Institution, borrower type | Amount initially borrowed | Amount now owed | Percentage change |
|---|---|---|---|
| Four-year, non-completer | $10.1B | $10.7B | 6% |
| Four-year, completer | $44.8B | $41.2B | -8% |
| Two-year, non-completer | $3.5B | $3.8B | 7% |
| Two-year, completer | $5.7B | $5.8B | 1% |
| Certificate, non-completer | $1.3B | $1.4B | 7% |
| Certificate, completer | $2.7B | $2.9B | 7% |
The HEA Group reported similar differences in the amount owed depending on the type of institution.
The report found that the amount owed four years after initially taking out student loans varies greatly between non-completers and completers who attended a public college or university. There is a similarly significant difference for those who attended a private institution, but not a drastic difference for those who attended a for-profit institution.
| Institution, borrower type | Amount initially borrowed | Amount now owed | Percentage change |
|---|---|---|---|
| Public, non-completer | $9.9B | $10.4B | 5% |
| Public, completer | $31.5B | $28.9B | -8% |
| Private, non-completer | $2.7B | $2.8B | 2% |
| Private, completer | $13.8B | $12.2B | -12% |
| For-profit, non-completer | $2.3B | $2.6B | 15% |
| For-profit, completer | $7.9B | $8.8B | 12% |
Student success programs have risen in popularity in recent years. These programs, while varied in practice, often share the same goals of increasing graduation and retention rates at colleges and universities across the U.S.
Many have proved successful. At the City University of New York (CUNY) system, for example, Accelerated Study in Associate Programs (ASAP) helped nearly double the degree attainment rate for associate degree students.