Tuesday, December 31st, 2013
A growing number of young adults are stuck in what analysts are calling a “worst case scenario,” in which they are stifled by debt from college loans, but they never finished their degrees. More from NBC News:
According to a 2011 study by the Harvard Graduate School of Education, only 56 percent of students who enter four-year programs graduate within six years. That number plunges to 22 percent for for-profit colleges. Meanwhile, the percentage of incoming students relying on loans is growing—from 2001 to 2009, the number increased from 47 percent to 53 percent, according to a report by Education Sector. The same report also found that borrowers who drop out are four times more likely to default on their loans.
Some of these dropouts grew up middle class with an expectation of getting a degree, like [Christopher and Harmony] Glenn. Others are students from low-income backgrounds, perhaps the first in their families to go to college. Michelle Obama recently launched an effort to encourage these first-timers to pursue higher education, but the odds are stacked against them: Pell grants and funding for state and city universities continue to shrink. Forty percent of students at four-year colleges, and 60 percent at community colleges, are working 20 hours or more to make up for these gaps, according to the Pell Institute.
“A lot of these kids come up against this wall of bureaucracy,” said Jennifer Silva, author of Coming Up Short, a book about working-class young adults. “They lack mentors to help them navigate the system” of admissions, financial aid, and choosing classes. “It ends up leaving them feeling kind of betrayed.”
Image: College debt, via Shutterstock
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Friday, July 15th, 2011
Parents who are trying to teach their children fiscal responsibility will want to take note of a new study by sociologists at Ohio State University that found that young adults between ages 18 and 27 view credit card and school loan debt as marks of maturity and achievement, rather than potential burdens.
In fact, an OSU report stated, the higher the credit card and college loan debts among young adults, the more self-esteem they reported.
Researchers warned that while debt can present opportunities to young people–such as attending college–it should not be taken lightly.
“Debt can be a positive resource for young adults, but it comes with some significant dangers,” said Rachel Dwyer, an assistant professor of sociology and the study’s lead author, “Young people seem to view debt mostly in just positive terms rather than as a potential burden.” The report also drew conclusions about how socioeconomic class affected young adults’ perception of debt:
Results showed that those in the bottom 25 percent in total family income got the largest boost from holding debt – the more debt they held, both education and credit card, the bigger the positive impact on their self-esteem and mastery.
Those in the middle class didn’t see any impact on their self-esteem and mastery by holding educational debt, perhaps because it is so common among their peers that it is seen as normal. But they did see boosts from holding credit-card debt – the more debt, the more positive effects.
On the other hand, the study found that young adults who came from the most affluent families received no boost at all from holding debt.
“The wealthiest young people have the most resources and options available to them, so debt is not an issue for them,” Dwyer said.
“The groups that most need the debt – the middle and lower classes – get the most benefits to their self-concept, but may also face the greatest difficulties in paying off what they owe.”
(image via: http://www.ehow.com/)
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