A new report on the college dropout rate featured depressing statistics:
— 46% of those who enter a U.S. college fail to graduate within six years
— only 37% of African Americans graduate within 6 years
— only 42% of Hispanic students graduate within 6 years
The report, American Dream 2.0, asserts that at a time when college tuitions are skyrocketing faster than income, financial aid is in decline. As a result, student loan debt is at record highs. Since 2002, student loan borrowing has doubled. It is now at $113 billion. Many students end up with large debt and no degree in the end.
The report makes recommendations to break the cycle:
Make the financial aid simple and transparent
Embrace innovations that serve all students
Urge institutions, states, and students to share responsibility for producing more graduates without compromising access or affordability
The report also called for a mandate to tie financial aid to graduation success. The Obama Administration attempted to regulate for-profit colleges via “gainful employment” rules but the banking lobby in Washington won the battle and weakened the proposal severely. They also sued. A federal judge put the proposal on hold in July. The gainful employment rules set to weed out predatory lenders who burden students with debt from diploma mills that yield no results.
“Education is an economic issue,” says Marc Morial, president of the National Urban League and member of the coalition behind the report. “We have to build a more equitable system of higher education to make us more competitive in the world economically.”
The American Dream 2.0 report was funded by the Bill & Melinda Gates Foundation. The report has been endorsed by state lawmakers, college presidents, civil rights leaders, and business leaders.