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College Completion Linked to Job Success and Increasing Debt

Young people with increasingly higher levels of education are faring better in the job market, but they are also dealing with growing debt that is leading many to default on their student loans.

Today, the National Center for Education Statistics released its massive annual report, The Condition of Education with new data on participation and success of students in college, as well as their employment and financial status after graduation.

Educational success. From 1990 to 2012, the percent of 25- to 29-year-olds who had received at least a high school diploma or its equivalent increased from 86 percent to 90 percent, and the percentage who had completed a bachelor's degree or higher increased from 23 percent to 33 percent. Also, 7 percent of these young people held a master's degree or higher, which is a 3 percentage-point increase from 1995, according to the 2013 NCES report.

A gender gap in college attainment is widening. In 1990, there was no measurable difference in the percentage of males and females who had completed a bachelor's degree or higher. In 2012, the percentage of women with at least a four-year degree was 37 percent compared with 30 percent for men. Women are also more likely to complete a master's degree now, which was not the case a decade ago.

Nearly 61 percent of females and 56 percent of males who enrolled in a four-year college in 2005 finished with a degree within six years, the NCES data show.

While all racial and ethnic groups improved their educational levels, the white-black gap still remains and is not measurably different from 1990 to 2012, the NCES reports. Whites in their late 20's who had at least a high school diploma rose from 90 percent to 95 percent, while the rate among blacks went from 82 percent to 92 percent. The gap did close among Latinos, as high school attainment increased from 58 percent to 75 percent in that period.

The job payoff. For young adults with a bachelor's degree, the employment rate was 86 percent, compared with 74 percent for those with some college, 64 percent for high school graduates, and 48 percent for high school dropouts, the NCES finds. For those with less education, men are faring better on the job market. In 2012, the employment rate for young adults with less than a high school diploma was 57 percent for males and 36 percent for females, and among high school graduates, 68 percent of men had jobs compared with 59 percent of women. For young adults with college degrees, the jobless rate was not measurably different by gender.

Between 2000 and 2011, the earnings of young adults with a high school education from $32,700 to $30,000 (an 8 percent drop), while those with a bachelor's degree made 14 percent more with salaries rising from $52,100 to $45,000.

The financial investment. The NCES report quotes figures from the Federal Reserve Bank of New York's "Quarterly Report on Household Debt and Credit" of total student-loan debt, across all age groups, reaching $956 billion in the fall of 2012, triple what it was in 2003 at $304 billion (in constant 2011 dollars). In 2011-12, on average, students at private for-profit colleges took out $8,700 in debt, compared with $7,500 for those attending private nonprofit four-year institutions. At public four-year institutions, about half of students had loans, and the amount averaged $6,300.

Of the nearly 4 million students who entered the repayment phase in fiscal 2010, about 9.2 percent, had defaulted on the payments within the year, up from 8.8 percent that defaulted in 2009 and 7.1 percent who did in 2008. Those who had the most trouble meeting their loan obligation were from private for-profit four-year institutions.

For more on other aspects of the report, see Inside School Research.

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