When it comes to collecting on student loans, the U.S. Department of Education treats college dropouts the same as Ivy League graduates: They just want the money back. New data show the perils of that approach.
Dropouts who took out loans to finance the degrees they ultimately didn’t obtain often end up worse off for attending college. Unlike their peers who earn degrees, dropouts generally don’t command higher wages after leaving school, making it harder for them to repay their student debt. The typical college dropout experienced a steep fall in wealth from 2010 to 2013, figures from the Federal Reserve in Washington show, and an 11 percent drop in income—the sharpest decline among any group in America.