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8 Reasons Students Drop Out of College

8 Reasons Students Drop Out of College
Jacqueline DeMarco
Jacqueline DeMarcoUpdated September 14, 2022
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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.
Getting a college education requires a great deal of discipline, money, and time. It’s not an easy feat, and there are a number of obstacles that can get in a student’s way and cause them to drop out of college. In fact, according to research, 25% of students dropped out of college between their first and second years. But even if they leave school, students can still have a lot of debt to pay off. Here’s why students drop out of college and how it can affect their student loan repayment. 

Why People Leave School

So why do people drop out of college? There are countless reasons why college students drop out. Here are some of the most common ones. 

1. Insufficient or Loss of Funding

The high cost of college is one of the top reasons students drop out. Paying for tuition, room and board, living expenses, school fees, books and supplies, is expensive. The average cost of a year of college in the US is $35,551. In some cases, students may lose access to funding they expected (whether it’s from federal financial aid, family support, or another source) and this can leave them in the lurch. Students can fill out the Free Application for Federal Student Aid (FAFSA®) annually to see how much federal financial aid they qualify for. 

2. Personal Family Commitments

Family obligations are another common reason why students drop out of school. They may need to take on a caretaker role for their children, their parents, or their siblings. It can be very difficult to balance the needs of their family with the work and the time required for their college courses. They might also have to work to support their family, which can make going to school even harder. 

3. Not the Right School

Why do college students drop out? Sometimes they discover that they chose the wrong college. The institution may not be a good fit for them personally, or perhaps it doesn’t meet their educational needs the way they thought it would. They might drop out in order to enroll at another college, or to take time out to explore other options. 

4. Lack of Time for School

If someone is balancing multiple responsibilities such as raising children and/or working, it can be very difficult to keep up with classes, homework assignments, and studying for exams. They may find that attending college just doesn’t fit into their packed schedule. 

5. Personal Health Reasons

When a person is struggling with health issues, they may find it very hard to focus on school. That’s especially true if they are going through treatment for a condition or experiencing a lot of symptoms. Understandably, they may choose to drop out of college to focus on their health. 

6. Irresistible Job Offer

Not all reasons that people drop out of college are negative. A student may receive a job offer that is too good to pass up, and they decide to drop out to take it. 

7. Unprepared for the Academics

College can be quite challenging for even the most prepared student. If a person hasn’t learned the skills and acquired the discipline required to succeed in school, they may find that dropping out of college and taking time to work on those things can save them a lot of stress and money. 

8. Opportunity to Do Something Else

One of the reasons why college students drop out is because an exciting opportunity comes their way. They get the chance to travel, learn on the job as an apprentice, start their own small business, or pursue a project they’re passionate about. They leave college in order to do so.

Pros and Cons of Dropping Out of College

College isn’t for everyone and dropping out isn’t necessarily a bad thing. Here are a few different pros and cons to consider. 

Pros of Dropping Out of College

There can be benefits to dropping out of college if it truly isn’t the right fit for a student, such as: 
  • Save money on fees and tuition
  • Chance to begin a career earlier
  • Pursue non-academic opportunities like entrepreneurship

Cons of Dropping Out of College

On the other hand, there are distinct disadvantages associated with dropping out of college, including:
  • Wasted time and money on an unfinished degree
  • Loss of (some) earning potential 
  • Need to start student loan repayment early

Demographics of College Dropouts

According to a 2022 report from the Education Data Initiative, 39 million Americans were college dropouts in 2020. Here is some information the report found about college dropouts:
  • First-generation college students have a 92.2% higher rate of college dropouts than students whose parents have college degrees 
  • Students from households with incomes in the lowest quarter are 79.3% more likely to drop out than students from households in the highest quarter
  • College dropouts are more likely to live in California than any other state

Career and Financial Prospects of College Dropouts

Statistically, dropping out of college does affect career and income. College dropouts earn an average of 32.6% less than those with bachelor’s degrees, and dropouts are 19.6% more likely to be unemployed than workers who have some kind of higher education degree. 

Repaying Student Loans After Dropping Out

While all private lenders have different repayment plans and rules, dropping out of college does impact federal student loan repayment. Once a student drops out, they have a six-month grace period before they have to begin repaying their federal student loans. Unless they’re leaving school for a good job opportunity, students may have trouble making enough money to pay back their student loans. 

Student Loan Refinancing

There are ideas for repaying student loans that can help. One option that may make the repayment process easier is student loan refinancing. This allows a person with multiple student loans to refinance them into one new loan. There are advantages and risks of student loan refinancing to be aware of. Advantages include simplifying the loan repayment process by giving the borrower just one student loan to pay off. The borrower may also be able to secure a lower interest rate, which can save them money on their student loans and make repayment easier. But there is also a major disadvantage: When a student refinances a federal student loan, it becomes a private loan, and the student loses access to valuable federal benefits like student loan forgiveness, which is when you are no longer required to make payments on your federal loan by meeting certain criteria. If you refinance, you no longer qualify for student loan forgiveness.

Do Dropouts Qualify for Student Loan Forgiveness?

In many cases, dropouts do not qualify. Federal student loan forgiveness programs typically apply to certain careers, such as teaching and nursing, that require a college degree. You must also work in these fields, and meet specific criteria, for a certain number of years. However, if you work for a nonprofit organization or the government, you might qualify for the Public Service Loan Forgiveness program even if you didn’t graduate from college. 

Grants to Pay Back Student Loans

If you need help paying off student loans, you may be able to qualify for grants based on your field or specialty that help you pay back your student loans after graduation. Most require you to do work in public service or to work in a high-need area. There are student loan repayment grants you can check into such as:
  • Nurse Corps Loan Repayment Program
  • Students-to-Service Loan Repayment Program
  • John R. Justice Program
  • Department of Justice Attorney Student Loan Repayment Program
  • Veterinary Medicine Loan Repayment Program
  • NIH Loan Repayment Programs for research scientists
Some corporations offer grant programs for their employees as a part of their benefits packages. Check with your HR department.

Student Loan Refinancing Rates Now

If you decide that refinancing your student loan makes sense, you can check your student loan refinancing rates with Lantern. (But remember: Refinancing means you will no longer be eligible for federal benefits like student loan forgiveness programs.) Just enter your loan amount, zip code, and credit score and you can get an idea of the refinancing rates you can qualify for, and also compare refinancing options from different lenders. Use Lantern to learn more about student loan refinancing options.

Frequently Asked Questions

What are the three most common reasons students drop out of college?
What factors contribute to college dropout rates?
Why are college dropout rates so high at the moment?
Photo credit: iStock/Sushiman

About the Author

Jacqueline DeMarco

Jacqueline DeMarco

Jacqueline DeMarco is a personal finance writer and editor based in Southern California. While she spends the bulk of her time writing about complex financial issues, she also tackles a variety of subjects ranging from food to fashion to travel. Her work can be found across dozens of publications such as Credit Karma, LendingTree, Northwestern Mutual, The Everygirl, and Apartment Therapy.
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