There are a lot of scary numbers in the world of student loans. Total debt, average monthly payments, and default rates should be enough reason for students to excise great caution.
Yet it is the graduation numbers that this student expert finds deeply troubling.
Before jumping into the stats, it is important to point out one critical fact: Everybody who starts a 4-year degree program expects to graduate. Most student loan borrowers view the risk of not graduating as minimal. Sure there are people who don’t graduate, but that is a somebody else’s problem.
The numbers say it is something that everyone should consider:
Only 60% of students graduate within six years.
This number was calculated by the National Center for Education Statistics, a part of the Department of Education. They only looked at first-time, 4-year degree students who were enrolled full-time.
That means that two out of every five students who start college will not graduate within six years.
If we narrow things down to the 4-year college students who actually get a degree in four years, the number gets even worse.
Only 41% of students graduate within four years.
Nearly all college students who attend a 4-year college expect to have a degree four years later. The reality is that most of them do not. Some will finish after five or six years, but many still will not have a degree.
This means that any student starting college needs to seriously consider the possibility that things won’t go according to plan. This is especially true for those borrowing large sums of student debt to fund their education. Student loans are a challenge for graduates with jobs to pay off. Every student should have a viable backup plan in place.
These two stats mean students need to know that:
- They might never graduate, and
- Even if they get a degree it could take longer and cost more than expected.
An Extra Year or Two of College is Expensive
The advertising materials that colleges hand out will almost certainly assume students will be graduating within four years. After all, four years of tuition, fees, books, and living expenses is already really expensive.
The extra year or two of college will almost certainly see a spike in costs:
- Most scholarships last a maximum of four years,
- Tuition lock programs usually last a maximum of four years, and
- Money set aside for college could be gone by year five and six.
Making things even more difficult is that each extra year of school is one less year of full-time work. Instead of earning money, these students are racking up more debt.
The best way to mitigate the costs of an extra year or two of school is to utilize summers to earn as much as possible. Additionally, students who have taken extra classes may be able to add a minor or even a second major by the time they graduate.
The big danger is not graduating at all…
Protecting Yourself in Case College Doesn’t Work Out
Students who are unable to graduate are not just worse off than their classmates with degrees, they are in a worse position than people who never went to school at all.
The stats make it clear that a degree is far from a certainty, but the one thing that is for certain is student debt. Lenders won’t care if you graduated or not, they still want their money back with interest.
The good news is that there are ways to make sure that not graduating doesn’t haunt you for life. The most important thing is to only borrow federal student loans to pay for college. This is because federal loans come with borrower protections like income-driven repayment and student loan forgiveness. These critical protections help ensure that the debt is manageable under any circumstance.
Another great way to keep costs manageable and protect long-term interests is to start your education at a local school or community college. These less expensive schools often have partnerships with larger universities to ensure credits will transfer. Students are able to sink or swim at college with a dramatically reduced financial risk. Those that have success can transfer to the more expensive and possibly higher regarded school after a couple of years. The diploma doesn’t come with any asterisk, the student saves money along the way, and potential employers won’t care where a student took their introductory level courses.
The college graduation numbers are disappointing.
When students start pursuit of a 4-year degree, they expect that four years later they will be a graduate entering the workforce. For approximately 3 out of 5 students this will not be the case. Some will take longer to graduate and others won’t graduate at all. The majority of students do not graduate on schedule.
Confidence in yourself is a good thing, but it is important not to bury your head in the sand. Having a Plan B isn’t about planning for failure… it is about ensuring success in some form.