Student Loan Debt for College Dropouts

Last updated on November 15, 2017

If a college student drops out without graduating, they’re still responsible for paying back any student loans that they incurred while in school.


A report released by the US Department of Education indicates that recent college dropouts are walking around with a student loan debt that equals about 35% of their annual income. The worst thing about this, however, is that the students never completed their college agree and, therefore, are unable to garner higher-paying jobs.

When you break out the data to compare different types of colleges and universities, the trend becomes even more disturbing. In particular, students with the highest debt levels are those who begin yet fail to complete their degrees at private nonprofit institutions. In particular, students from these schools owed an average of 51% of their annual income in student loan payments.

Dropouts from for-profit institutions carried a debt load of about 43% of their annual income, while students who fail to graduate from public institutions want up with about 34% of debt load.

The Department of Education compared the debt burdens for students who failed to finish college, looking at information from students enrolled in 1995 to compare them with students enrolled in 2003.

The report indicates that 19% of students at private nonprofit schools fail to graduate within 6 years. But same token, 22% of students at public universities could not graduate in a six-year time frame.


This raises two very important issues for students preparing to apply to college.

  1. First, it is vitally important that students try to complete their degrees as quickly as possible. To speed up the time to graduate, students might consider taking additional classes at community college to fulfill general education requirements. This can be done during the summers. The benefit of attending community college to complete GE requirements is that the tuition is very cheap. In California, for example, any community colleges charge about $45 per unit. For a 3-unit class, that is a mere $135.
  2. A second issue that postings must keep in mind is that student loan debt must be handled very carefully. In particular, students need to keep their debt loads to the lowest possible amount.