According to the U.S. Department of Education, student loan borrowers who do not completely their degree are three times more likely to default on their loans. Dropping out of college is a very personal decision. Maybe you’ve decided to pursue a different opportunity or you’ve simply realized books and exams aren’t for you. Either way, if you took out student loans you'll risk falling into financial trouble without a plan for paying back your debt.
I've run out of money!
Although it may seem like the obvious solution when you can’t pay your bills
, cutting your education short to get a job could be a short-term salve with big financial repercussions down the road. Research shows that workers with a bachelor’s degree earn significantly more money than those with some college or even an associate's degree.
Be careful you’re not cheating yourself out of more money later on in life. Create a budget and take a hard look at your finances to see if there are any expenses you can eliminate. Consider reaching out to your financial aid office to see if there is any help available. If you still find yourself falling short of paying your bills, switching to half-time status will allow you time for a job while still pursuing your degree.
I'm failing my classes!
Failing one class is easily fixed, but failing all or most of your classes can leave you feeling totally defeated. Even so, there are things you should consider before dropping out. Transferring to a community college can allow you to continue your education, defer payment on your student loans, and is often less expensive than four-year universities. Community college also offers more personalized attention that will help you acquire the skills you'll need to excel at a four-year college eventually.
I have a solid job offer!
Really consider if this opportunity is worth more than finishing your college education. Even if you think you will return to school eventually, most students who leave school never end up returning. If you accept the job, try to continue your classes in some capacity while you work. If this is not possible, you will need to come up with a loan repayment plan BEFORE you leave school. Find out how much you owe and what you can expect your monthly payments to be. You don’t want to be surprised by loan payments
just as you are starting out on your own.
I just hate college!
College isn’t right for everyone. If you have considered all of your options and still decide that dropping out is what you want, you should do it the right way. Contact your financial aid office as soon as you have decided to drop out. They will be able to tell you if you are eligible for a refund and give you information about re-enrolling if you want to in the future. As soon as you leave school, your six-month grace period of deferment begins. After this, you will need to start paying on your student loans. Look into income-driven repayment plans and make sure you know the rules surrounding deferment and hardship.
You don’t have to graduate college to reach your financial goals, but having a plan to pay back your loans if you drop out can make sure you achieve those goals. If you are struggling to pay back your student loans or other debts, Veitengruber Law
can help. We offer debt management solutions specific to every unique situation.