Value of Completing a Degree
One significant step student loan borrowers can take to reduce their risk of default is to complete a degree program. This page offers statistical information regarding the value of completing a degree in relation to student loan default.
Relationship between Unemployment and Degree Completion
Unemployment disproportionately impacts those with lower levels of education; according to the Bureau of Labor Statistics. In 2012 the unemployment rate was twice as high for persons without a high school diploma than for persons with an Associate's degree. That gap widens to almost three times in comparison to persons who hold a Bachelor's degree. The unemployment rate for persons with Master's, professional and doctoral degrees was the lowest, at 2-4 percent.
Salary and Degree Completion
Completing a college degree, in most situations, results in a boost in pay. The Bureau of Labor Statistics reports that persons with a high school degree make, on average, $652 weekly. In comparison, persons with an Associate's degree make $785, those with a Bachelor's degree make $1,066 and those with a Master's degree earn the most at $1,300 a week. According to these numbers, a person with an Associate's degree is likely to earn nearly $7,000 more each year than someone with only a high school diploma, a person with a Bachelor's degree is likely to earn $15,000 more a year than someone with an Associate's degree, and an individual who possesses a Master's degree is likely to earn nearly $12,000 more annually than someone with just a Bachelor's degree.
Education and Employability
Nationally, the number of new jobs in occupations that require some postsecondary education are expected to experience higher rates of growth than those in on-the-job training categories. In Iowa, nearly two thirds of the top 50 fastest growing occupations require some type of formal training program or postsecondary education. By 2018, it is projected that 62 percent of jobs in Iowa will require postsecondary education.
Degree Completion and Student Loan Default
Student borrowers who withdraw before completing a degree are more likely to default on their student loans than those who complete a degree. The average student loan debt for Iowa students who graduated in 2009 is nearly $29,000. Many experts recommend that student loan payments not exceed 8 percent of income. Based on a 10-year standard repayment schedule, Iowa students would need to make over $50,000 out of college to stay within this recommendation. Students who don't complete their degrees face lower-paying job prospects in addition to burdensome student loan debt obligations.