It’s no secret that college tuition is expensive, but the surprising part may be how the uptick in costs have led to a 51% dropout rate, according to a new study.
According to a survey from LendEDU, an online student loan refinancing company, and FundingU, a student loan lender that helps students who don’t have cosigners, more than half of the current college students surveyed said they had to drop out of college after they were unable to find funding. What’s more, nearly 79% of those surveyed added that they may need to delay graduation as a result of financial constraints, and 55% of them said they struggled to find enough money to pay for college overall.
According to the College Board, the average cost of tuition and fees for the 2017-2018 school year was $34,740 at private colleges, $9,970 for state residents at public colleges, and $25,620 for out-of-state residents attending public universities. Nationally, student loan debt is the second-highest debt category in the U.S. after mortgage debt, amounting to $1.48 trillion nationwide spread out about 44 million borrowers.
LendEDU said the average student now owes around $27,975 upon graduation—a sum that many will be paying back well into their 30s.
One of the biggest problems for students is that most don’t have access to a cosigner. LendEDU found that 60.6% of private student loan applicants apply without one, and only 4.9% are approved.
“Each year, about 2 million students apply to banks to attain critical ‘last gap’ loans to reach graduation. Those without cosigners are rejected, and poor/moderate income students are disproportionately represented in this rejected cohort,” Jeannie Tarkenton, co-founder and CEO of FundingU, said.
Mike Brown, research analyst for LendEDU, who worked on the study, said “the results of this poll were surprising and particularly demoralizing because the respondent pool was made up of young Americans that were already in college and looking to continue their studies.”
“Staying in a respective college or university based off of academic merits alone is already stressful enough, but imagine coupling the stress of achieving good grades with the struggle of finding enough cash to continue attending classes,” Brown said.
LendEDU and FundingU polled a total of 569 current college students from around the country that submitted a request for a non-cosigned student loan to continue their college education.