The current debate about student loan debt generally spotlights the struggles of young college graduates. The image of a young adult, unable to find a job, maybe even moving back in with her parents, often comes to mind because this best fits our own experiences or because these are the borrowers most often depicted in media accounts.
There is no question that the problems faced by “traditional” students are critical and should be addressed in policy reform. However, focusing exclusively on this population is a huge mistake. It ignores the fact that the majority of students are “non-traditional.” A non-traditional student, according to the U.S. Department of Education, is an individual who meets one of these categories:
- delays enrollment after high school,
- attends postsecondary education part-time,
- works full-time while going to school,
- is financially independent,
- has dependents other than a spouse,
- is a single parent, or
- does not have a high school diploma.
Despite the term “non-traditional”, these students greatly outnumber traditional students. Low-income students are even more likely to fit the non-traditional profile and more likely to rely on student loans than their high or middle income traditional student peers.
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. Only about 9% of low-income students get college degrees!
There are no easy answers to this problem. In fact, a recent New York Times article ends with a quote from a fellow at the Atlantic Council that “No one has the slightest idea what will work. The cupboard is bare.”
Clearly this is a difficult problem, but one that we must address if we want equal access to opportunity in this country to be more than an illusion.
We can get started by reviewing some facts. Although much more study is needed to understand why borrowers default on student loans, there are some common risk factors that emerge from existing studies. Lack of completion is the most commonly cited reason for default. The recent debate about the value of a four year college diploma is important. However, as the Education Sector recently reported, college graduates, even those facing very real short-term economic problems, tend to bounce back the quickest after a recession. Those who do not graduate or have other risk factors for default tend to experience the most devastating financial consequences.
In addition to low completion rates, students who attend for-profit or two year community colleges are more likely to default as well as those who do not have high school diplomas. Older students are also more likely to default as well as some borrowers of color. Low parental educational attainment is another risk factor. Most of these risk factors closely track the defining characteristics of non-traditional students.
These studies show that improving college completion rates requires more attention to the needs of non-traditional students. At a minimum, the policy debate should recognize the diverse population of student loan borrowers. Our low-income clients, for example, include very young individuals who are often in financial trouble because they withdrew from school or completed a program that did not prepare them for employment. We also represent single parents in their 30’s and 40’s as well as borrowers in their 80’s or 90’s. The government is still hounding these borrowers, in many cases taking away portions of their Social Security lifelines. Some are severely disabled or otherwise cannot work, but many come to us because they want to go back to school and improve their employment prospects. We need to reset our policy priorities so that these borrowers are given the opportunity for a fresh start, to finish school, and hopefully climb the economic ladder.
We will profile our “non-traditional” borrower clients in subsequent articles.