Finances Are Top Reason Millenials, Gen Zers Don't Finish College

Finances Are Top Reason Millenials, Gen Zers Don't Finish College

Students with lower household incomes are significantly more likely to leave school
college students hanging out on campus

A recent study of 20- to 34-year-olds who are no longer attending college but have college credits found that money is the most common factor prompting them to leave school.

The new data comes from a survey by the University Professional and Continuing Education Association (UPCEA) and online educator StraighterLine, looking at why students enroll in college and why they drop out. And although many come to higher education to fulfill a personal goal or seek career advancement, they often leave for financial reasons.

Why do students drop out?

Financial burdens are a major source of concern for millennial (ages 23 to 34) and Gen Z (ages 20 to 22) students. When asked why they stopped school, 42% of survey respondents cited money reasons.

Respondents in the lowest income brackets were by far the most likely to leave. Of those who stopped attending college…

  • 65% had household income of $50,000 or less
  • 33% had household income of $50,000-$100,000
  • Less than 2% had a household income of more than $100,000

The severity of financial hardship for college students is hard to overstate. A separate study earlier this year from Course Hero found that 60% of full-time and part-time college students had difficulties affording food and rent.

After financial struggles, the second-most common reason in the UPCEA/StraighterLine survey was "family or personal commitments" (32%). The researchers found that many millennial students were working parents who sometimes could not afford both attending college and raising a family.

For those who left, it's uncertain whether financial burdens will be alleviated any time soon: More than half of the former students now work full time, but many are employed in the retail or food and beverage industry, which include some of the lowest paying jobs in the U.S.

Other research has shown a similarly deep connection between money and education. For instance, a survey this summer found 49% of recent public high school graduates wanted to pursue higher education but didn't due to a lack of sufficient financial aid.

What would bring students back?

The UPCEA/StraighterLine study also asked about why millennials and Gen Zers who left school went to college in the first place. The most common reason was "a personal goal" (62%), followed by reasons related to career advancement (44%), love of learning (42%) or receiving a better salary (40%). In many cases, the study said, these are the same reasons they would want to return to education.

But what would make coming back to school feasible? Among the survey respondents, the commonly cited form of support that could make a return to college possible were:

  • Certificates for credits already earned (70%)
  • Courses at a lower price (62%)
  • Workshops to address struggles (58%)
  • Counseling (55%)
  • Concierge services (46%)

The study also found that the happier an individual was as a student, and the less time has passed since they left, the more likely they were to return.

If financial issues led you or someone you know to drop out of higher education, an investigation of financial aid options could help. Researchers have found many households with college-bound students lack awareness of financial aid resources that could make school much more affordable.

Methodology: The UPCEA and StraighterLine research study targeted adult learners 20-34 years of age. In total, 3,236 respondents participated in the study, of which 1,021 met all qualifications. Students who were currently enrolled in a college or university were removed from the study. The study used the following definitions for the generations: Generation Z were those respondents currently aged 20 to 22, and millennials were those aged 23 to 34. The sample consisted of 63% female respondents, 33% male, and 4% who were gender-variant, nonconforming, non-binary or prefered not to say.