There are plenty of practical reasons to try your best not to drop out of college. For example, many “dream jobs” require certain college educations, and you may not be able to get the job of your dreams without graduating. However, these aren’t the only reasons to avoid dropping out at all costs. Here are a few strictly financial reasons why dropping out is a bad idea.
Created by: OneClass
1. It’ll Take You Nearly Twice as Long to Pay Off Your Debts
It’s true that by dropping out, you’ll end up with less absolute debt. On average, college leaves you with about $7,100 in debt per year. That means dropping out after two years will give you $14,200 rather than the full four-year debt of $28,400. However, lower payments and more refinancing problems means that you’ll actually take much longer. A college graduate will take about 19 years to pay off student loans from the time they started college, while a dropout will take about 34 years on average.
2. You’ll Pay More in Interest
Even though you’ll end up with less absolute debt, a college dropout is likely to pay more in interest. Consider a common student loan interest rate of 4.66% on the amount of student loans these students are accumulating. After everything’s all said and done, a graduated student will have paid $11,944 in interest, whereas someone who dropped out after two years will have paid $13,635 in interest. Even though the graduate’s starting debt was a full $14,200 more than the dropout’s, they will still pay nearly $2,000 less in interest.
3. You’ll Make Less Money on Average
You probably know that finishing a college degree can increase your income on average, but do you now how much? Astonishingly, someone with a bachelor’s degree is likely to make about 49% more on average than someone with only some college experience. The U.S. Bureau of Labor Statistics says that those who have some college experience make $41,704 on average, whereas those that have a bachelor’s degree make $62,296 on average. Over a 40-year career, that’s a monumental $823,680 more for those with a bachelor’s degree.
4. You’re Less Likely to Be Able to Utilize Common Loan Help Options
Many loan helping options are open mostly to people who have graduated from college. Financial institutions tend to see all dropouts the same: as people who are less trustworthy and more wishy-washy than people who actually graduated. You’re unlikely to be able to plead your case to a financial institution about why you had to drop out. Instead, those without a degree tend to all be grouped together. That means you might not be able to refinance your loan, for example, to reduce your interest rate.
As you can see, these financial reasons not to drop out of college make a pretty convincing story. If you can avoid it at all, you really want to. For some people, the stress of college makes it difficult for them to succeed. If this sounds like you, it might be a good idea for you to look for online resources that can help you rise to the challenge. With resources available to help, you don’t have to worry about the financial difficulties that can arise when you drop out.