Sunday, November 25, 2012

The Cost of the College Dropout Crisis

Here’s a WSJ article about the terribly high cost from the college dropout crisis:

The rising cost of a college education is hitting one group especially hard: the millions of students who drop out without earning a degree.

A bachelor's degree remains by far the clearest path to the American middle class. Even today, amid mounting concerns about the rising cost of higher education and questions about the relevance of many college degrees, recent graduates have lower rates of unemployment, higher earnings and better career prospects than their less educated peers.

But as more Americans than ever before attend college, more too are dropping out before they ever don a cap and gown. That means millions of Americans are taking on the debt of college without getting the earnings boost that comes from a degree. Dropouts are more than four times as likely as graduates to default on their student loans.

While the high school dropout crisis gets all the attention, believe it or not the college dropout rate is TWICE as high, as this chart shows (from page 53 of my slide presentation):

Note that this chart UNDERstates the problem, as it only shows people pursuing four-year degrees. Here’s the data on two-year degrees (from page 63 of my presentation):

Lack of preparedness leads to nearly half of all students beginning higher education by attending a community college, which has negative consequences:
-        One study showed that 73% of students entering community college hoped to earn four-year degrees, but only 22% had done so after six years (and only 35% had earned a college degree of any sort)
-        41% of students at public two-year colleges drop out after their first year and only 28% have earned a two-year degree after three years
-        A study by the Pew Charitable Trusts found that three-quarters of community college graduates were not literate enough to handle everyday tasks like comparing viewpoints in newspaper editorials or calculating the cost of food items per ounce

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