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The cost of dropping out: Student loan debt for over 1million Americans who did NOT complete college grows by $1 BILLION

Student loan debt for Americans who dropped out of college grew by $1 billion, new data revealed, as millions are hoping to get their debt wiped out by a new Biden administration forgiveness program.

A new report from the Higher Education Advisory Group found borrowers who took out loans from 2013 to 2015 but never completed college collectively owe $918 million more than they borrowed in the first place four years later in 2017 to 2019.


Those who took out loans and did complete college in the same time frame owe $3.2 billion less than the amount they first borrowed. 

The report, commissioned by the National Association of Student Financial Aid Administrators, used federal databases to analyze debt of 3.9 million student loan borrowers from 1,949 institutions of higher education.

‘College completion is critical to success. And if you complete your degree, you’re more likely to show an ability to pay down your student loans compared with those who enter college, but never finish,’ said the report.


Data shows borrowers who took out loans from 2013 to 2015 but never completed college collectively owe $918 million more than they borrowed in the first place four years later

Data shows borrowers who took out loans from 2013 to 2015 but never completed college collectively owe $918 million more than they borrowed in the first place four years later

Data shows borrowers who took out loans from 2013 to 2015 but never completed college collectively owe $918 million more than they borrowed in the first place four years later

‘If these borrowers now owe more than they initially borrowed, it may indicate that they earn too little to keep up with accumulating interest on their federal loans.’

The report also found that the type of institution, regardless if completion, can play a role in how much money student loan borrows owe.

According to the analysis, students who complete their programs at for-profit institutions owe $951 million more four years later and those who did not finish owe $337 million more than they first borrowed. 


President Joe Biden has been facing pressure to cancel student loan debt after the Supreme Court struck down his plan to forgive $400 billion in debt.

Federal student loan interest resumed in September and payments picked back up in October after a three-year pause that began during the COVID-19 pandemic.

Two weeks ago, Biden fast-tracked a new student loan forgiveness plan which wipes out debt for certain borrowers who have been in repayment for the last decade.The plan, which will come into effect in February, will apply to borrowers who took out relatively small loans and are enrolled in the Biden administration’s new income-driven payment plan.

‘[Borrowers] who took out less than $12,000 in loans and have been in repayment for 10 years will get their remaining student debt cancelled immediately,’ Biden said.



The plan was originally set to begin in July but is going into effect six months earlier. applies to borrowers enrolled in the new income-driven repayment plan known as Saving on a Valuable Education plan (SAVE). 

President Joe Biden fast-tracked a new student loan forgiveness plan which wipes out debt for certain borrowers who have been in repayment for the last decade.

President Joe Biden fast-tracked a new student loan forgiveness plan which wipes out debt for certain borrowers who have been in repayment for the last decade.

President Joe Biden fast-tracked a new student loan forgiveness plan which wipes out debt for certain borrowers who have been in repayment for the last decade.

The Supreme Court struck down President Joe Biden 's $400 billion student loans forgiveness plan in June 2023. The justices ruled 6-3 against Biden's plan

The Supreme Court struck down President Joe Biden 's $400 billion student loans forgiveness plan in June 2023. The justices ruled 6-3 against Biden's plan

The Supreme Court struck down President Joe Biden ‘s $400 billion student loans forgiveness plan in June 2023. The justices ruled 6-3 against Biden’s plan

‘This action will particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans,’ said Biden.


‘It’s part of our ongoing efforts to act as quickly as possible to give more borrowers breathing room so they can get out from under the burden of student loan debt, move on with their lives and pursue their dreams.’

The SAVE plan offers far more generous terms than several other income-driven repayment plans that it´s meant to replace. Previous plans offered cancellation after 20 or 25 years of payments, while the new plan offers it in as little as 10. The new plan also lowers monthly payments for millions of borrowers.

There are 30 million people eligible for the SAVE plan, with 6.9 million currently enrolled, according to the White House.

Counterintuitively, those with smaller student loan balances tend to struggle more. It’s driven by millions of Americans who take out student loans but don’t finish degrees, leaving them with the downside of debt without the upside of a higher income.


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