Higher Education

DEBT WITHOUT DEGREE: The human cost of college debt that becomes “purgatory”

In a vicious circle, debt and low-paying jobs make it tough to earn a way back to college

After a 20-minute walk, and a 10-minute wait in the rain, DeAngelo Bowie catches the bus to get to work. Bowie, 24, dropped out of Georgia State after financial problems derailed him from his dream of becoming a history teacher.

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Hundreds of thousands of young people borrow money from the federal government every year to pay for school, hoping that the job prospects that come with a bachelor’s degree will be worth the investment. But many students, even those choosing the most affordable option — state public colleges and universities — drop out, often leaving themselves thousands of dollars in debt. Nationally, nearly 3 million federal borrowers withdrew from public institutions between 2013 and 2015.

ATLANTA – DeAngelo Bowie goes to work five days a week at 1 p.m. at a pet store warehouse and stacks boxes until the work is done. On a good day, he’s out by 9 p.m. On a bad day, he won’t leave until 1 a.m.

He’s trying to figure out how to parcel out his meager paycheck to pay back college loans for a degree he never finished.

Bowie navigated a daunting obstacle course of family and health crises during his teenage years and made it to his dream school – Georgia State University. But he left in the middle of his sophomore year, with $12,000 in federal student loans.

In doing so, he joined more than 108,000 other students who withdrew from Georgia’s public colleges and universities between 2013 and 2015 with thousands of dollars in federal student debt but no degree.

These former students have few prospects for well-paying jobs, yet the loans they racked up mean that making a decent wage is even more imperative. But many find themselves working in warehouses, as Bowie does, or retail jobs, scraping by to make monthly loan payments. And many, like Bowie, may want to go back to school but can’t because they’ve defaulted or they fear of sliding further into debt.

“You’re in purgatory,” said Nicole Smith, chief economist at Georgetown University’s Center on Education and the Workforce. “You have this extra burden and debt on you that cannot be written off. Because you don’t have the higher credential, you’re not going to be able to get the job to pay it. It’s a significant problem.”

The numbers of students with school debt but no degree are large enough that the financial impact goes beyond individual struggles and weighs on the state’s economy. By 2025, more than 60 percent of Georgia jobs will require some kind of post-secondary education, and now only 45 percent of the state’s young adults meet that criterion.

Related: DEBT WITHOUT DEGREE: Students drown in debt despite a $524 million state surplus

Growing up in the Bankhead section of Atlanta, Bowie always saw college as a way out of poverty, not something that would confine him to it further. “I was never unaware that we were poor, and I always thought college was the exit ticket for it,” said Bowie, 24.

In grade school, Bowie and his younger brother were their mother’s pride and joy. Always at the top of their class, they were also fierce leaders of the debate team, and beat even the top local private schools. Their academic successes continued into high school, until Bowie’s brother began having emotional outbursts and bouts of paranoia that seemed to come out of the blue.

One day Bowie found his brother drenched in sweat and passed out at the school’s track. He said God had told him to run and never stop. He was diagnosed with schizophrenia. Teased mercilessly at school and with few mental health resources available to him, he dropped out,  and was eventually incarcerated.

His brother’s decline was a huge blow to Bowie. Nonetheless, he made it through the rest of high school, and kept his GPA high enough to be accepted at Georgia State University, where he wanted to study to be a history teacher.

Bowie arrived on campus lacking in study skills but armed with his family’s support, a federal grant for low-income students, a work-study grant and student loans. He also got a job to help cover his living expenses and the tuition and fees that were left over.

He worried about the debt he was racking up, as he saw his family struggling to stay above water. He worked two jobs, sometimes logging 40 hours a week at a nearby Checkers restaurant. At times he would miss class for work, and there was little time for homework. Besides, his study habits were pretty poor – he hadn’t needed to study much in high school. His grades plummeted.

DeAngelo Bowie, a top student in high school, dropped out of Georgia State with $12,000 in loans. He is to pay off the bulk of it so that he can re-enroll, but is hampered by the low pay of jobs that require no college degree.

“Once I started messing up, I lost faith,” he said, shaking his head. “Honestly, I didn’t know how to handle it. I knew I needed more time for my studies, but I didn’t see any way out of it financially.”

After three semesters, he dropped out and went home to regroup. He applied for the first of what would be several low-paying warehouse jobs, hoping to repay his debt and start fresh.

Repayment rates for loans are lower for students who withdraw from college, like Bowie, compared to those who graduate, according to federal data. Students who withdraw are also much more likely to default on their loans; dropouts make up two-thirds of defaults nationwide.

In Georgia, the problem is particularly acute at the public research and regional universities, where students often sign on for higher levels of debt in the hopes that a bachelor’s degree will lead to a higher paying job. The number of dropouts with federal loans at these institutions has grown from 35,443 in 2007-09 to more than 56,600 in 2013-15. In that time the median student debt at most schools more than doubled.

Most economists agree that too few residents with college degrees will slow Georgia’s economic growth, which could affect all residents. It’s a problem occurring in other states as well.

Related: The new North-South divide: Public higher education

“More income means more tax revenue, and generally more educated taxpayers have less demand for state services,” said Professor David Sjoquist, an economics professor at the Andrew Young School of Policy Studies at Georgia State. “The kinds of jobs that are growing are the kinds that require more education, so if we had more residents with those degrees, they would find jobs.”

The 20 occupations projected to suffer the biggest declines in Georgia require only some college or less, while the top four with the highest projected growth require at a minimum an associate’s degree, according to the Georgia Department of Labor.

This summer, Bowie began the process of trying to get back to college, only to find out that his $12,000 in loans had been sold to a collection agency. He is in default and has to pay off the bulk of it before he can re-enroll at Georgia State.

“I would have to pick up a second job to make a significant dent in it,” said Bowie, who already works 40 to 50 hours a week. “But I don’t know how I’d do it. Some days I’m lucky if I have time to get up and have breakfast before it’s time to go back to work.”

Nearly all of the college dropouts interviewed by The Hechinger Report were either working for low-paying hourly jobs or had started their own businesses. That’s typical, said Smith of the Center on Education and the Workforce.

“The prospects there are very difficult,” Smith said. “You are competing in a declining labor market.”

And most students who leave school don’t make it back. A study of the California State University system found that only 30 percent of students who drop out re-enroll at their original college.

If Bowie can buck this trend and be successful, he’d not only be helping out his family but the state. A report from the Georgia Department of Labor predicts that the need for teachers will rise in the state by 2020, along with other positions such as accountants, software developers and registered nurses. Nationwide, jobs that require a bachelor’s degree or higher have grown by 8.4 million during the economy’s recovery.

If Georgia’s universities can’t supply those workers, businesses might look to hire people from out of state, meaning upward mobility for Georgia’s low-income residents will stagnate. Or they might hire unqualified workers and train them in-house – which could harm productivity and drive away companies considering relocating to Georgia, Smith said.

In 2011, Georgia launched an effort to tackle this issue called Complete College Georgia. The work began with a $1 million grant from the Complete College America Foundation, a national organization that works with states to improve graduation rates.

As part of this program, each institution has to develop annual strategies to retrain and graduate students, such as shortening the amount of time it takes students get a degree, improving agreements between two- and four-year schools so credits transfer more easily and placing fewer students in only remedial courses during their first semester.  The system has also started a program called Go Back, Move Ahead to get adults to return to school by making it easier to enroll and offering flexible course schedules. In some cases, people can also use military or volunteer experience to earn credits.

Related: States have cut money for higher education 17 percent since the recession

In 2011, the University System of Georgia had a 74 percent first-year retention rate. In 2016 it was 79 percent. Graduation rates, however, have not had a similar improvement; six-year graduation rates at the state’s universities remain at 57 percent.

Governor Nathan Deal speaks before signing several bills, including HB 338, in Atlanta, on Thursday, April 27, 2017. HB 338 aims to allocate support for low-performing schools in need of assistance.

Retention rates at the Technical College System have stayed around 67 percent since 2011, but graduation rates are up, from 54 percent to 70 percent. But fewer people are enrolled in technical schools, meaning the system conferred about 3,000 fewer degrees, diplomas and certificates in 2016 than 2011.

Officials agree that the stability of Georgia’s economy hinges on the success of Complete College Georgia. As Gov. Nathan Deal put it in 2012, six months after the launch of the program: “To have a successful future in Georgia, and remain competitive nationwide and globally, we have to have an educated workforce, and that means we need to do a better job getting people into college, make sure they receive a high-quality education and then graduate them.”

Bowie says he won’t give up on his dream of returning to school and becoming a teacher.  Many students share similar sentiments and some Georgia college administrators refer to them as “stopping out” rather than dropping out.

In 2015, his stepfather, who had been a steadying force in the family, dropped dead from a heart ailment. “It was like losing two legs off a chair,” Bowie said.

His mom and four siblings were evicted and became homeless, living in temporary housing in a motel for ten months. Last fall, she was able to rent a house and keep the family together. Bowie respects his mother’s tenacity and devotion to her family, but he says he knows that her lack of a degree has held her back.

“My mom graduated a year early from high school,” said Bowie. “She’s really smart, but she never went to college. I feel like it’s history repeating itself.”

He said if he could clear his loans and get some financial assistance, he knows he could make it.

“I would put my focus on school,” he said, staring out into the parking lot in front of his house. “I would want A’s, just because I know what I can do. If I could actually put in the effort, I know could graduate with honors.”

This story was produced by The Hechinger Report in a collaboration with The Atlanta Journal-Constitution. The Hechinger Report is a nonprofit, independent news website focused on inequality and innovation in education. Sign up for our newsletter.

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