Insult to Injury: Rise in People with Student Loan Debt—and No College Degree

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It’s bad enough to graduate from college with a mountain of student loans in a world where the prospects of landing a good job are terrible. But at least grads have something that should help their careers in the short- and long-term: a college degree.

College graduation season has come to be somewhat of a depressing time of year because it’s when grads must come to grips with the one-two reality punch that 1) it’s not going to be easy to find a job; and 2) their student loan payments are looming.

Graduation season has to be an even more depressing time of year for college dropouts—who are reminded of what they’re not getting at this time of year, namely a college degree. What more and more college dropouts do have, though, is student loan debt. A new story in the Washington Post focuses on this group of “non-completers,” the growing number of Americans who took out loans and started college, but who never finished and who are never going to reap the rewards of having a college degree.

(MORE: Is Forgiving Student Loan Debt a Good Idea?)

According to the WaPo’s analysis of government data, nearly 30% of Americans who borrowed for college wound up dropping out. In 2001, by contrast, 23% of those with student loans became dropouts. Unsurprisingly, it’s the dropouts who are “most likely to default on their loans, falling behind at a rate four times that of graduates.”

Despite many debates about whether college is necessary, or whether it’s worth the money, a college degree is enormously valuable—for job seekers today and even more so down the line. As my TIME Moneyland colleague Dan Kadlec pointed out recently:

In the U.S., 62% of jobs require a degree beyond high school; that share will rise to 75% by 2020. In 2010, 90% of college grads from 2008-2010 were employed while only 64% of peers not attending college had jobs.

So why are more and more students unable to finish what they started and get that piece of paper? The WaPo piece points to a number of issues, including the fact that more students are pursuing degrees while working full- or part-time, indicating that college isn’t their top priority. We all know that college costs have been rising as well, making loans more of a necessity for more students, and thus increasing the odds that those who drop out have loans.

(MORE: What Student Loan Debt Crisis? Survey Says We’ll Spend $5 Billion on Graduation Gifts)

The rising level of dropouts with loans coincides not only with the stagnation of the economy in recent years, but also the rise of for-profit colleges—institutions described by some as “predators.” Among the criticisms of for-profit colleges is that they encourage students to enroll (and take out loans) who aren’t suited for an institution of higher learning. The numbers bear out the critique: Roughly half of the students who take out loans to study at a two-year for-profit college never earn their degrees, compared to about 20% of students at traditional (nonprofit) private and public colleges.

What can be done about student loan debt? Considering the lackluster state of employment, and the all-too-common scenario today in which college grads find themselves working jobs that don’t require college degrees, it’s arguable that many grads and dropouts alike have reason to regret taking out student loans.

Among the many suggestions for fixing the broken system is an op-ed, also published in Washington Post, a couple of days before the report on dropouts with loans. In the column, Robert J. Samuelson flatly calls into question the decades-long push for all (or nearly all) Americans to go to college:

Like the crusade to make all Americans homeowners, it’s now doing more harm than good. It looms as the largest mistake in educational policy since World War II, even though higher education’s expansion also ranks as one of America’s great postwar triumphs.

(MORE: 60 and Still Not Out of Student Loan Debt: Seniors Facing $36 Billion in College Loans)

Yet another suggestion, published by Forbes, boils down to the idea that colleges should be “eliminating the departments that offer majors that employers do not value.” In other words, get rid of the humanities and liberal arts whole hog, which, contributor Peter Cohan writes, would save the colleges money—and save students time and money:

Those students could skip college and go right to their jobs as waiters and receptionists. They would be better off because they would not incur the crushing debt loads that they would never be able to pay back.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.