Yes, a College Degree is Still Worth It

For most students who finish and earn their degree, the evidence suggests the answer is ‘yes’ — says new research conducted by Ipsos and Navient. The study, “Money Under 35,” explores the financial health of Americans between 22 and 35 years of age.

The study reveals that college graduates have higher levels of employment and income. In fact, the study found that 80% of bachelor's degree holders are employed full time, compared with just half of their peers who started college but did not finish.

Furthermore, degree holders are more likely to own a home and put money away each month for savings. In contrast, those without a degree are more likely to feel less financially stable and less likely to have enough saved for an unplanned expense.

The data makes clear that while college is valuable, it is critical for those who begin a degree—especially those who take out student loans—to finish what they started. So, this begs the question: what pressures do non-completers face that lead to dropping out?

Not surprising there are several factors. Young adults who did not complete their degrees reported financial challenges outside of school as a top barrier, as well as difficulties balancing class and work schedules.

College students who left school prematurely also were significantly less likely to feel they had help navigating college life, whether from parents, other family members, friends, or even professors and university administrators, than those who finished.

Support, both financial and otherwise, throughout the education journey is clearly an important ingredient of degree completion.

How, then, to help more young adults receive and retain that support so that they may complete their path to a degree since a degree can be such a difference-maker? 

With just 6 out of 10 students finishing a bachelor’s degree within six years, the best assistance is before a student decides where to attend school, long before spending hard-earned savings or taking out student loans.

As a start, students need better information to help them determine whether costs align with their prospects after graduation, including the cost of any debt they will incur in the process of earning a degree. In the course of providing $40 billion in grants and $95 billion in student loans each year, the federal government collects a significant amount of information about students — information that could be used to provide real-time counseling just as students are making choices about where to attend and whether and how much to borrow.

Schools also have a role. Our research showed that young people who feel supported either by their families or college personnel are more likely to continue their educational journey.  Many colleges and community organizations are experimenting with novel approaches to get more students over the finish line.

For example, Eastern Connecticut State University’s “Eastern in Four” program trains advisers and peer tutors to help all freshmen develop a four-year academic plan by the end of their first semester. Students who are first in their family to attend college receive additional support. Early warning signs like skipping class lead to additional outreach.

Another organization, the Posse Foundation, works with multiple partner colleges to create cohorts of first-generation students who support each other through graduation and beyond.  University of Delaware’s NUCLEUS program provides an intensive study skills program and a supportive home for at-risk students.

Schools that grow their graduation rates should be encouraged and rewarded. Schools should also have some skin in the game when students do not complete and are unable to repay their government loans.

Further, the federal student loan program offers many options to help individuals who for myriad reasons are struggling with their student loan payments. But accessing programs such as income-based repayment can be complex, requiring lengthy forms and documentation. Student loan servicers, like my company, which work for the federal government, are using data and analytics to support student borrowers and simplify the process of enrolling in these flexible repayment programs. At Navient, we developed multi-channel support, using e-sign technology, that has doubled or even tripled the number of borrowers who enroll.

Finally, the law should be changed to give an easier landing to those who, despite all of these efforts, continue to struggle with their student loans. Federal and private student loans should be dischargeable in bankruptcy after the borrower has made a good faith effort to repay. The federal government should also write-off old defaulted loans like the private sector does.

Increasing college completion and reducing the financial risks of not finishing must be at the forefront to help young adults achieve greater financial health.