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Saddled With Debt — and an Unfinished Degree

More than half of students who enroll in a higher education program fail to finish. How can colleges correct course?

College graduates
John Amis/The Associated Press

College tuition has skyrocketed over the past 30 years — and along with it student loan debt. A national debate over whether a college degree is worth the cost has many of us wondering: How do you measure the true value of higher education?

Researcher Matt Chingos is looking into it. Surprisingly, he’s found that the cost of college isn’t the primary reason students are struggling. 

The public is really concerned about tuition and fees,” said Chingos, the director of the Urban Institute’s education policy program. But research shows that spending more per student has a bigger impact on student outcomes than reducing tuition. It’s not that tuition amounts don’t matter, but we need to be thinking both about the cost of attending and the quality of education and the support that we’re providing.” 

A quant at heart, Chingos is approaching the issue through data analysis. It’s a struggle in its own right, since, until recently, good statistics on higher education were not readily available. 

In K‑12 education, there was that huge push toward institutional accountability in the 1990s and early 2000s with the No Child Left Behind Act,” he said. In higher ed, we’re just getting to this idea of holding institutions accountable. That it’s not just the students’ fault when they fail; we also have to consider the services they’re getting.”

Until 2017, the federal government only kept tabs on full-time students who’d never enrolled before. New numbers that for the first time include part-time and transfer students reveal a crisis in higher education: Fewer than half the students who enrolled in 2008 had obtained a degree or certificate by 2016

The college completion crisis is a key concern for Arnold Ventures, which funds research by Chingos and others to find evidence-based strategies that will increase the return on investment for college students, particularly those from low-income backgrounds. That means not only reducing tuition and expenses, but helping more students complete their degrees — and take less time to do it. 

The poster child we tend to see for this problem is the guy with the $100,000 film degree from NYU, which has dubious value in the labor market. He lives in his mom’s basement and works at Starbucks and can’t pay off his debt,” Chingos said. The actual person we should be concerned about is the single mom who’s older and enrolls in community college; she maybe has only a few thousand dollars in debt, but she defaults on her loans and it ruins her credit.” 

The latter scenario is in fact far more common than the former, said Chase Sackett, the policy and advocacy manager for Arnold Ventures’ higher education portfolio. While the average amount of student loan debt in the U.S. is around $20,000, the people most likely to default on their loans are the ones who’ve borrowed less than $5,000.

Most of them are community college students who drop out and are not able to pay that off,” Sackett said. These students are more likely to start off from a lower socioeconomic level in the first place, and of course you’re much less likely to earn as much if you didn’t complete college.

At the very least, you shouldn’t come away worse than you went in,” Sackett said. But that’s what happens for many students who drop out: Not only have they wasted their time, effort, and tuition, but they come away saddled with debt and no more employable than when they entered. 

How do we flip the equation? Better research and data is a part of it. So is broadening the definition of the problem, and therefore, the solution. 

Graduation rate within eight years for first-time, full-time college students
Graduation rate within eight years for all college students — including part-time and transfer students
1 in 3
Proportion of people who owe less than $5,000 for their education who default within four years
1 in 7
Proportion of people who owe more than $35,000 for their education who default within four years