Read This Article Before Dropping Out of College – Your Wallet Will Thank You

You'll hear the term "high school dropout" now and then, and you may not think of college dropouts. But there are plenty of people who don't finish college, too. The National Center for Education Statistics notes that there were 2 million high school dropouts aged 16 to 24 in the U.S. in 2021. That's a lot, but the overall dropout rate dropped from 8.3% in 2010 to just 5.2% in 2021.

The percentage of college students who don't make it to graduation is actually higher. If you think you might join their ranks and drop out of college, keep reading -- because there are many reasons to stick it out.

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College dropout rates

Let's look at the numbers first. According to data from the Education Data Initiative, roughly a quarter of full-time first-year college students drop out of college -- and among part-time first-year college students, more than half do. Yikes.

That's very bad news -- because while college is expensive, not having a college degree can be costly, too.

Note that it can be perfectly fine to not attend or finish college if you're planning a career in a trade, such as being an electrician, plumber, or carpenter, or if you're targeting a particular profession that doesn't require a degree. But for most other folks, finishing college is worthwhile.

Reasons to finish college

Some assume that it won't make that much of a difference to your life if you drop out of college, but they're wrong. Indeed, according to poll results published by The Wall Street Journal, fully 56% of Americans no longer think that a college degree is worth the time and money it costs. But consider these statistics, from a variety of sources:

• According to the Social Security Administration (SSA): "Men with bachelor's degrees earn approximately $900,000 more in median lifetime earnings than high school graduates. Women with bachelor's degrees earn $630,000 more."
• The SSA adds: "Men with graduate degrees earn $1.5 million more in median lifetime earnings than high school graduates. Women with graduate degrees earn $1.1 million more."
• According to data published by the Federal Reserve Bank of New York, college graduates early in their careers earn about 52% more than young workers without a college degree -- around $17,680 more, on average.
• The Federal Reserve Bank of New York also noted that college graduates faced a significantly lower unemployment rate than young workers without college degrees -- specifically, 2.1% versus 6.9%, respectively, in the first quarter of 2023.
• The Public Policy Institute of California (PPIC) notes that "In addition to having higher earnings and better job benefits, college graduates are more likely to own a home and less likely to be in poverty or need social services."
• According to a Northeastern University report: "Not only are there more jobs available to degree holders than high school graduates, but the existing jobs are also more accessible."

Here are some stark differences, laid out in a table from the National Center for Education Statistics:

Source: National Center for Education Statistics. 

Financial tips to help you finish college

If you're in college now and are having trouble financially, don't just drop out. Do a little digging online and consult a financial aid counselor at your school. There are multiple possible sources of funding, and lots of financial tips that could help, too. For example:

• Apply for financial aid at your school -- you might receive more than you expect.
• Search far and wide for scholarships you might qualify for. There are many that get overlooked. Some sites to check include Scholarships.com, ScholarshipOwl.com, and Fastweb.com.
• If any loved ones are willing to help you pay for college, look into 529 plans, which can be win-win, as they can offer donors a tax break. There are other college savings accounts that might help, too, such as Coverdell ESAs.
• Consider getting a car. Yes, it costs money, but it can help you hold down a part-time job while you're in school, and it might even help you build a valuable network of friends, if you end up giving rides to stores or other places.
• You might look into transferring to a less costly school. Yes, prestigious private schools offer some advantages, but doing well at a low-cost state school can lead you to great success, too.
• Some employers, such as Starbucks and UPS, will pay for some or all of your schooling. Do a little digging online to see if any would work for you.

If you've already dropped out of college...

You can go back! The Education Data Initiative has reported that while there were 39 million college dropouts in America in July 2020, close to a million of them re-enrolled for the fall semester. That's a lot of people, but still a small portion of dropouts.

Know that many schools -- such as Brown University, Tufts University, and Indiana University -- have special programs specifically to help those who want to resume their undergraduate education.

So reconsider dropping out of college. There's a lot to gain if you finish an undergraduate degree.