Nothing to show for it: Financial Distress and Re-Enrollment Aspirations for those with non-degreed debt

Abstract

The number of individuals with student loan debt who do not earn their degrees is on the rise; nevertheless, there is little research that demonstrates their current circumstances and future aspirations. We address this knowledge gap by comparing the financial distresses and re-enrollment aspirations of student debt-holders who started college but did not earn a degree—those with non-degreed debt (NDD)—to (a) individuals who have a high school diploma and no student debt, (b) individuals with some college and no student debt, and (c) individuals with a college degree and no student debt, and (d) individuals with a college degree and student debt. Through these “downwards,” “sideways,” and “upwards” comparisons, we are able to provide a 360 degree view of the unique circumstances and outlooks faced by individuals with non-degreed debt. We find that individuals with NDD had greater odds of experiencing material and healthcare hardships, as well as financial difficulties. Individuals with NDD also had greater levels of financial anxiety and lower levels of financial well-being. Despite these challenges, individuals with NDD were often more optimistic about their future college enrollments and earnings. We discuss the implications of these findings with regards to financial aid policies, debt repayment policies, and college retention and re-enrollment efforts.