For people who graduate with a bachelor’s degree, higher education is overwhelmingly a smart investment. But what about students who drop out?  As it turns out, less than 60 percent of Americans actually complete a B.A. within six years of starting. Do they reap a benefit?

Last week, the Hamilton Project at Brookings offered up an answer that might surprise some readers. In short:  Yes, a few years of higher ed, even if a student never earns their degree, are better than none.

It’s not just that dropouts earn more than workers who halted their educations after high school or are a bit more likely to have a job (both are true). It’s that, once you factor in all the costs of going to school such as tuition and the years of foregone wages, attending and dropping out is still a profitable choice. As the graph below shows, the annual return on investment for even a bit of college is, on average, higher than the ROI for stocks, gold, Treasury bonds, or housing.

Not a bad deal, on average. But does this mean we can stop worrying about whether students are finishing school? Not quite. While the report states that “the downside risk of trying for a college degree but not making it all the way to a degree is not that bad,” the truth is that a substantial number dropouts fare poorly once they leave school.

Take earnings. Yes, on average, college dropouts are paid more than mere high school graduates. But many are not, as shown on the graph I’ve put together below. About 51 percent of high school graduates earn less than $30,000 a year. For college dropouts the figure is just a bit better, at 44 percent (the figure is a relatively low 24.5 percent for college graduates). Going to school and leaving without a degree might yield a pay bump. But there’s a strong chance it might not.

Then take college debt. As Education Sector reports, dropouts default on their student loans more than four times as often as graduates. Fewer dropouts borrow at all, but the numbers suggests that many end up flailing financially.

So college dropouts are, in the end, much more likely to be overwhelmed by the costs of their education than college completers. They’re also far from guaranteed to outearn high school graduates. For some students, a few years of school might be worthwhile. But for others, a little education is a very financially dangerous thing.

Photo credit: Fresh News

Via The Atlantic