Millions of student loan borrowers don’t have a diploma to show

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US student debt increased by more than 100% in the last 10 years and today 44.7 million borrowers have a total debt of more than $ 1.7 trillion dollars of student debt.

But not all of these borrowers there is degree to show your debts

According to the National Center for Education Statistics, total 41% full-time college students receive their first bachelor’s degree in four years, and only 59% get a bachelor’s degree in six years. And if you look at those who took out student loans to finance their degree, these graduation rates are very relatively similar

After a six-year course, many students drop out. The percentage of college graduates in eight years is simply 60.4%

The most difficult borrowers “tend to be more like students who started at community college, had an unexpected event in their lives and did not graduate,” said Philippe Levin, professor of economics at Wellesley College. previously told CNBC Make It… “They made an investment that had no return, they were stuck in this debt, and it is difficult for them to get out of this debt.”

Default rate among non-degree borrowers three times the rate borrowers who have received a diploma.

Beth Akers, a senior fellow at the American Enterprise Institute and staff economist at the Council of Economic Advisers under President George W. Bush, says student loan borrowers without a degree represent “the number one student credit crisis.”

“I have for a long time ditched popular stories about student loans as this crushing economic issue for society, but I think that in terms of focusing on places where student debt is a very serious problem, it is this debt and there is no problem with the degree. when we see people in serious financial difficulties, ”she says.

One possible solution, she says, is “preloading some of the Pell grants that students receive over the course of their college careers so that they receive more in the first few semesters. Thus, if they try to go to college, they are not. don’t work for them, they used up grant dollars instead of borrowing for themselves. “

Anthony Carnavale, director of the Georgetown Center for Education and Workforce, says people who have received student loans but have not received an advanced degree should not have priority in forgiving loans.

“I think the loan forgiveness process is a good process, and it has been resumed by the Biden administration,” he says. “On average, the loans that people get to go to college pay off. There are a minority of times when they don’t, and this is one of them, because if you don’t get your degree, you get a sheepskin penalty. ”

“Sheepskin Penalty” means an increase in the wages of employees with diplomas, to which employees without diplomas do not have access.

“This damn piece of paper gives an 8-10% increase,” says Carnavale.

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