The Real Issue: Failing to Graduate Is Costly


David Leonhardt is the editor of Upshot at the New York Times and posted a useful article titled The Reality of Student Debt Is Different From the Clichés. It reminds me of the challenges our society has in dealing with complex topics captured in the headlines but that often inadvertently distort the real source of risk.

Leonhardt’s article conveys student loan debt is not the primary problem facing U.S. Higher Education. Though the Brookings research, on which his article relies is not without controversy, it does assert that despite the headlines on the rapid growth of student debt “the share of income that young adults are devoting to loan repayment has remained fairly steady over the last two decades.”

The article and Brookings are under some attack, but in my view it correctly focuses the discussion beyond student loan debt and onto the….”The vastly bigger problem is the hundreds of thousands of people who emerge from college with a modest amount of debt yet no degree. For them, college is akin to a house that they had to make the down payment on but can’t live in.”

Failing to graduate is costly. Roughly 4 in 10 students fail to graduate with a bachelors within six years. In fact, you can download an Infographic that illustrates non-graduate borrowers are 4x more likely to default on their student loans and 29% of students with student loans dropped out of college in 2009. Though it is clear that academic readiness is a fundamental problem, financial issues are frequently behind the reasons students are unable to complete their degrees; when you read the details closely, even the recently announced ASU and Starbuck’s partnership appears to be focused correctly on improving college completion.

Bottom line is that college is a great investment, but it isn’t risk free.

It is a big part of why Bill Suneson and I founded GradGuard with the mission to promote greater student success by helping students and their families overcome the financial losses that can result from unexpected events that may disrupt their pursuit of a higher education. In fact, other risks also interfere with college completion – such as unexpected life events such as student accidents or illness, the death of a family member and even theft.

In reality we should all be worried about over-borrowing for a college education, (for full disclosure from 2002-2006 I worked in the student loan industry and some ofNGI’s largest clients are lenders) but we should also give greater focus to the greater the more enduring problem of college completion.

For my higher education colleagues, (particularly those attending summer industry conferences such as ACUHO-INASFAA, Noel Levitz or NACUBO events) I ask:

  • What tangible activities are you involved with to promote college completion of students?
  • What is your campus doing to help protect the investment in education?
  • How is your campus helping students overcome the financial losses that may disrupt their education?

Please let me know what you think. I welcome a conversation with anyone who has suggestions for how to address these issues and how GradGuard can help support greater student success and college completion.