College Dropouts: Debt Without Degree

The U.S. is home to over $1 trillion of student debt, but education experts are saying that an increasing number of young adults have no degree in return for their debt. Nearly 30% of college students who took out loans have dropped out of school, which is up from a decade ago at around 25%, according to the Washington Post.

The dilemma is causing scrutiny of public policy that has attempted to increase access to higher learning, but did not address how to keep college students in college. Some education experts now say that taking out loans to start college without a clear plan will lead to a financial disaster for them.

The combination of money and time is claimed as the reason for so many dropouts. Many students take on part- or full-time jobs to help pay tuition, but that takes away time from studying, possibly causing them to drop out from poor grades.

The cost for the overall economy adds up to around half a trillion dollars. Though college dropouts make more than high school graduates, they earn around a million dollars less than a college graduate over the course of their career.

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Although students may not finish college, the schools still maintain their income from the loans, regardless of whether the students default or not.

Many schools have work and other programs to help students stay out of debt or help keep it manageable, but many of those are not robust or advertised enough to be taken fully advantage of.

Below is a list of for-profit education stocks with their year-to-date performance listed. Do you think any of these names will better utilize services to keep students in school?

List sorted by year-to-date performance.

Interactive Chart: Use the Compar-O-Matic to compare market caps for the stocks mentioned below:

1. Grand Canyon Education, Inc. (LOPE, Earnings, Analysts, Financials): Provides postsecondary education services in the United States. Market cap at $844.39M, most recent closing price at $18.82. The stock has returned 18.92% year-to-date.

2. K12, Inc. (LRN, Earnings, Analysts, Financials): Provides proprietary curriculum and educational services for online delivery to students in kindergarten through 12th grade (K12) primarily in the United States. Market cap at $758.55M, most recent closing price at $21.68. The stock has returned 18.0% year-to-date.

3. ITT Educational Services Inc. (ESI, Earnings, Analysts, Financials): Offers postsecondary-degree programs in the U.S. that provide diplomas as well as associate’s, bachelor’s, and master’s degrees. Market cap at $1.4B, most recent closing price at $58.97. The stock has returned 2.64% year-to-date.

4. Universal Technical Institute, Inc. (UTI, Earnings, Analysts, Financials): Provides postsecondary education for students seeking careers as professional automotive, diesel, collision repair, motorcycle, and marine technicians in the United States. Market cap at $307.28M, most recent closing price at $12.60. The stock has returned -1.81% year-to-date.

5. Strayer Education Inc. (STRA, Earnings, Analysts, Financials): Provides various academic programs through traditional classrooms and Internet. Market cap at $1.06B, most recent closing price at $91.75. The stock has returned -4.18% year-to-date.

6. The Washington Post Company (WPO, Earnings, Analysts, Financials): Operates as a diversified education and media company in the United States and internationally. Market cap at $2.63B, most recent closing price at $351.01. The stock has returned -5.72% year-to-date.

7. Career Education Corp. (CECO, Earnings, Analysts, Financials): Provides educational services primarily in the United States. Market cap at $482.63M, most recent closing price at $7.30. The stock has returned -9.91% year-to-date.

8. Capella Education Co. (CPLA, Earnings, Analysts, Financials): Provides online postsecondary education services in the United States. Market cap at $428.83M, most recent closing price at $31.70. The stock has returned -11.84% year-to-date.

9. Bridgepoint Education, Inc. (BPI, Earnings, Analysts, Financials): Provides postsecondary education services. Market cap at $1.03B, most recent closing price at $19.80. The stock has returned -12.26% year-to-date.

10. DeVry, Inc. (DV, Earnings, Analysts, Financials): Provides educational services worldwide. Market cap at $1.85B, most recent closing price at $28.92. The stock has returned -25.66% year-to-date.

(Written by Danny Guttridge)

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