College completion is the best default aversion

Career College Central Summary:

  • According to a New America Foundation analysis of the Department of Education's "Beginning Postsecondary Students" survey, of all students who began school in 2003-04 and were in default on their student loans six years later, the overwhelming majority — more than 60 percent — were students who left school with no degree.
  • Of all the dropouts in the survey — defaulting or not — about one in four were unemployed as of 2009.
  • That's twice the unemployment rate of students who obtained a bachelor's degree. Of course, not all college graduates avoid default.
  • But of completers who defaulted on their loans, nearly 88 percent earned just a certificate. That's nearly one in four of all those who obtained only a certificate within six years of starting school.
  • People who earned a bachelor's or associate degree basically do not default, with just 3.5 percent ending up in this status.
  • Those challenges are undoubtedly driven, at least in part, by the fact that about one in three of all students who earned a certificate or degree and defaulted on their loans was unemployed at the end of the survey.

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