Data Check: Student debt isn’t just a problem for graduates

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The high cost of a postsecondary education is borne not only by those who complete their degrees. A recent study by the US National Center for Education Statistics examined the federal student loan burden of American students who had not completed college or university in 2001 and 2009, and found they owed comparatively more, in addition to suffering higher rates of unemployment. These trends were amplified at private, for-profit institutions.
 
The rate of non-completion at public and private not-for-profit institutions did not change much between 2001 and 2009. The rate of borrowing amongst “non-completers” also remained much the same. Borrowing by students at public two-year colleges increased, but the inflation-adjusted amount fell. The story at for-profit institutions was very different. Non-completion rates increased, and borrowing by students at for-profits skyrocketed from 57 to 86 per cent. The amount borrowed increased by over 40 per cent.
 
Per credit earned, non-completers at for-profit institutions incurred debt at a rate almost 60 per cent higher than their counterparts who graduated. At public and non-for-profit private institutions, the actual amount of debt incurred per credit was much lower, but again, non-completers at these institutions took on proportionately more debt than graduates.
 
With employment rates amongst non-completers noticeably lower, it is not surprising that the amount of debt, as a percentage of annual income, would be significant for this group. Across all institutional types, the median ratio of debt to income rose between 2001 and 2009. For all non-completers, the ratio rose from 24 to 35 per cent. For the most indebted non-completers, the increase was even more dramatic, from 77 to 99 per cent of annual income.
 
There are lots of reasons not to finish a degree. We need to make sure that university is affordable for all students, so that no one leaves school crippled by debt.

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