Higher Education Completion Rates Offer Insights into Student Debt

Higher education completion rates can give us an inside look at current trends in higher education. These rates also give us insight into issues students face after they have graduated or after they have stopped their education. Rising higher education completion rates means that more people are able to find increased employment opportunities, higher salaries, and increased personal satisfaction. However, even with rising completion rates, many students do not attain their degree. Students who start school but stop out won’t find the same employment and financial advantages as those who finish. And both groups of students face an increased probability of debt.

Higher education completion rates have been steadily increasing for the past several years. The Fall 2012 Cohort report from National Student Clearinghouse Research Center shows a 58.31 percent six-year completion rate for students at both two-and four-year schools. Higher education completion rates vary across diverse population groups. In the 2012 cohort, Asians showed the highest completion rate of 70.3 percent. The completion rate for Whites was 67.1 percent, for Hispanics 41 percent and Blacks, 49.6 percent.

One of the issues facing the rising number of graduates is student debt. Tuition and higher education fees have increased and an increasing number of students have had to borrow to finance their education.  About 71 percent of graduates have student loans, and the average debt is more than $30,000.

Since the recession the average cost of in-state tuition has increased from 14 percent of median household income to 16.5 percent. This puts a burden on graduates, especially those from low-income and minority demographic groups. In 2017 the average cost of tuition and fees was 20 percent or more of the median Hispanic and Black households.

Black undergraduates are more likely than other demographic groups to receive federal grants and loans. As a group they graduated with the highest student loan debt. Black bachelor’s degree graduates with loans owed an average of $34,010 compared to $29,669 for all borrowers in general. Black  associate degree earners owed an average of $22,303 compared to $18,501for associate degree earners overall.

Hispanic students also have high rates of student loan debt. Median Hispanic household income is significantly lower than for White Americans.  This has an impact on their ability to finance their college education “Low-income students – especially students of color – are more likely to be financially independent for the purposes of student financial aid than their higher income and white peers,” reports the American Council on Education.

Even though higher education completion rates are rising, the problem of student debt also looms large for recent graduates and those who did not attain their degree. Money is the number one reason for students dropping out of school and not completing their education. And money is the number one reason they cannot go back to complete their education.

Students who did not graduate are faced with repaying student debt without the higher salary that higher education completion would have given them. They face a higher probability of unemployment and a future dominated by jobs that require higher levels of education.

Both graduates and those who stopped out of their education are faced with a dual dilemma. Both groups need to repay loans and both groups need to continue their education, either to keep skills current or for higher education completion. Employers also need these employees to continue their education so they can have a workforce that makes their company productive and profitable. For both employers and employees alike, education benefits can provide a solution. Student loan repayment assistance will make it possible for employees to manage prior student debt while they pursue additional education. Tuition assistance makes it possible for employees to complete their education and continue lifelong learning.

Employer education benefits are a way to keep the higher education completion rates rising for all demographic groups. Comprehensive benefits can assist students in meeting their current education costs as well as prior student loan obligations. Helping students to focus on higher education completion and advancement will benefit all stakeholders.