Center for American Progress

Viewing Student Debt Through the Lens of College Completion

Viewing Student Debt Through the Lens of College Completion

Across all states, the average amount of debt per graduate is lower than the average debt per borrower.

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idea_bulbThe link between debt and educational attainment is too frequently missing from national discussions on student loans. While it is easy to bemoan high levels of student debt and big numbers—such as the more than $1 trillion that Americans currently owe—not all loans are inherently bad. The major issue is whether students who borrowed completed their education. Data bear out this assertion. Borrowers who earn a degree are much less likely to default on their loans than those who do not, and dropouts represent an estimated 60 percent of all people who default on their loans.

In other words, it is far better to be a bachelor’s degree graduate with $28,400 in loans—the national average in 2013—than a dropout who owes $10,000. Similarly, from a state perspective, high levels of indebtedness may not be as problematic if they are due to a lot of students earning degrees.

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