A college education usually pays off. According to College Board statistics, individuals with higher levels of education earn more money and are more likely to be employed. College is a key ticket to social mobility in this country, but punching this ticket is rarely straightforward.
On one hand, the earnings advantage is due more to erosion in wages of those without degrees rather than increases in wages for those with degrees. Further, the advantages of college generally kick in only if a student graduates and unfortunately many students who enroll never receive their degrees.
The particular institutions that students attend also make a big difference. Not all graduates escape financial distress. In fact, graduates from certain sectors of higher education may be at greater risk of student loan default than those who drop out of programs in other sectors. The Institute for Higher Education Policy found that borrowers who graduated with a certificate had a similar default rate as those who dropped out from public four-year schools. This is significant because certificates comprise about 22% of all college awards. Borrowers who graduated with a certificate from a for-profit school actually had a higher default rate than the category of borrowers who dropped out from all types of institutions.
Keeping these caveats in mind, overall college graduates fare much better financially in this country than those who never go to college or enroll but do not complete. This makes completing college more important than ever. Yet just over half of all students who enroll in college for the first time end up with a certificate or degree six years later. Completion rates are even worse for low-income students. The shocking reality is that despite all of the government money spent on financial aid, the difference in college graduation rates between the top and bottom income groups has widened by nearly 50% over two decades. As the New York Times reported, this growing gap “. . . threatens to dilute education’s leveling effects.” Ultimately, as reporter Jason DeParle concluded, “With school success and earning prospects ever more entwined, the consequences carry far: education, a force meant to erode class barriers, appears to be fortifying them.”