What Is the College Dropout Debt Crisis?
Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What is the college debt crisis? What are the downsides of dropping out? What are alternatives to dropping out of college? How can dropouts pay off their debt?
Understanding the College Dropout Debt Crisis
Who Is Most Affected?
What Are the Effects of the Dropout Crisis?
College Dropout Rates Over Time
2015 - 2016: 24.7% 2016 - 2017: 24.5% 2017 - 2018: 24.4% 2018 - 2019: 23.8% 2019 - 2020: 24.1%
Downsides of Dropping Out of College
It can be difficult to pay off debt Many desirable jobs require degrees Unemployment rates can be higher People often find it challenging to return to school after dropping out.
Alternatives to Dropping Out
Taking a Year Off
Talking to Your Advisor/Counselor
Going Part-Time
Paying off Student Debt as a Dropout
When Do Payments Start Being Due?
Direct Subsidized, Direct Unsubsidized, or Federal Family Education Loan: six months after leaving school Perkins Loan: nine months after leaving school
Do Dropouts Qualify for Debt Forgiveness?
Income-Driven Repayment Programs
The Takeaway
3 Student Loan Tips
Once the pandemic-related pause on federal student loan payments ends, going back to making payments may be hard on budgets. One solution is to refinance to a lower interest rate, longer loan term, or both, depending on your situation. (The tradeoff is that you’ll be forfeiting federal benefits such as repayment programs.) Find and compare your student loan refinance options. Paying extra each month on your student loan can reduce the interest you pay and so lower your total loan cost over time. (The law prohibits prepayment penalties on federal or private student loans.) One pain-free way to pay down your student loan sooner: send in your tax refund to put against the principal balance. Since it’s money that has already been taken out of your pay, you won’t miss it.
Frequently Asked Questions
About the Author
Share this article: