It sounds like the worst of all worlds — borrowing money for college, then dropping out and facing the debt without a degree.
But a new study argues that the investment in even a partial college education is still worth it, amounting to average earnings of $100,000 more over a lifetime than for those who merely finish high school. That's a better investment return on average than stocks and bonds — though, of course, much lower than the return on college for those who finish.
"It is vastly better to get a college degree," said Adam Looney, policy director at the Hamilton Project, the Washington, D.C., think tank that authored the report. "But I think the evidence says that fears of dropping out, that there are big downside risks to trying it and not finishing it, I think those are overblown. For people who are interested in college, who have ambitions of going and have the ability and qualifications to succeed, I think the evidence suggests it's an extremely good deal right now."
The question is pressing because about half of starting college students now borrow to help pay for college. The latest figures from the Project on Student Debt found two-thirds of the college class of 2011 had debt at graduation, averaging $26,600.
But the bigger concern is those who don't graduate. Overall, barely half of college students nationally attain degrees within six years, according to data compiled last fall by the National Student Clearinghouse Research Center (though three-quarters of students who attend full-time manage to complete within six years). Student debt collection agencies don't care whether you got your degree.
The new report notes those with some college still earn $8,000 more per year than those with only a high school diploma. The report also notes that the national unemployment rate reported last week in the combined category that includes those with some college or an associate's degree was 6.5 percent — below the national average of 7.6 percent for people 25 or older.
The rate was 7.4 percent for high school graduates with no college, and 3.8 percent for those with a bachelor's degree.