Financially Illiterate College Borrowers Drop Out at 30% Rate

NEW YORK (TheStreet) — Student loan debt now surpasses $1.2 trillion, higher than any other consumer debt save for home mortgages, according to the Consumer Financial Protection Bureau.

It's a fast-growing problem, as student loan debt has doubled since 2007, according to Kansas State University, and a problem colleges and universities don't seem to be addressing.

"Financial issues are one of the top reasons, if not the No. 1 reason, that students drop out of college," says Sonya Britt, associate professor of family studies and human services at Kansas State's College of Human Ecology. "Thirty percent of students who have student loans drop out of college, which is a pretty alarming percentage."

In their research report, Financial Literacy in Higher Education: The Most Successful Models and Methods for Gaining Traction, Britt and Dottie Durband, director of the university's School of Family Studies and Human Services, note that the vast majority of U.S. colleges don't have a financial literacy program.

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Such programs could go a long way in helping college students understand the impact loan debt has on their lives and help them get, manage and pay off those loans more quickly and efficiently.

"Most of the students who enter college don't get financial literacy courses when they're in high school, so many students aren't familiar with basic money management skills such as making payments and the awareness of how fast credit card debt accumulates," Britt says. "There's a lot of need but not a lot of resources for college students."

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