About one out of every eight Americans has student loan debt. But not all of those people have a college diploma.

This often-overlooked segment of student loan borrowers is larger than you may realize, and these borrowers struggle with pervasive debt later in life. Let’s take a close look at the rates and outcomes of those who take out student loans but never earn their college degrees.

Student Loan Borrowers Who Don’t Graduate College

About 40 percent of undergraduates drop out of college. Hence, the student loan statistics of a college freshman class can paint a different picture than the debt statistics of graduating seniors.

Using the most recent data from the U.S. Department of Education, we’re able to get a clear picture of the student debt problem of college students who don’t graduate. Among students who take out student loans to attend college or university, less than half complete their studies and graduate.

From this analysis, we see that 57 percent of students who take on student debt don’t go on to graduate. This is skewed higher than the 40 percent dropout rate for all students. In other words, students who take on student debt are dropping out of school at higher rates than the entire student body.

Students Who Don’t Graduate Struggle to Escape Debt Burden

The aggregate outcomes reveal that those with student loans but not a degree have the financial obligation of the debt without the income boost that comes along with a college degree.

According to the Bureau of Labor Statistics, the median income for someone with a bachelor’s degree is $64,896. That’s about 50 percent higher than the median income of $43,316 for those with a high school diploma and some college, but no degree.

For those who don’t have a degree but are faced with student loan payments, it’s hard to get out from under the debt. Data from the Department of Education shows that 12 years after starting college, those who graduated have 58 percent of their loan balance leftparatively, those who never graduated have 84 percent of their loan balance left.

Even though interest rates on a student loan are better than the interest on credit card debt, the long-term debt burden of a year or two of college can last for decades.

For those who don’t graduate, student loans have a dramatic impact on long-term personal finances. They’ll have a harder time repaying their loans, face increased interest accrual, and have repayment plans that extend for longer periods of time.

The Vice President of the Institute for College Access and Success explained to the Chronicle for Higher Education: “Where you go to college and how you go to college and how you pay for college all affect your chance of completing and having burdensome debt.”

How Does College Graduation Affect Loan Repayments And Defaults?

A long-term research project from the federal government tracked borrowers 12 years after starting college in the 2003-04 school year. The results show that borrowers who attain a bachelor’s degree have lower rates of defaulting and deferring their student loans. Conversely, those who didn’t earn their degree have lower rates of having paid off their loans, obtained loan forgiveness, or are currently making payments.

In comparing the outcomes of those who graduated versus those who didn’t, there is a clear trend that favors college graduates. College dropouts are four times as likely to default on their student loans than their counterparts who did graduate. This finding is an increase from an earlier longitudinal study where default rates were three times higher among those who didn’t graduate.

What’s the Big-Picture Relationship Between College Degrees and Student Loans?

In aggregate, the completion of college is associated with lower default rates on student loans. This is true at both state-level data on higher education as well as the data about different college types.

In the data below, there is a clear trend that shows as college dropout rates rise, so do student loan default rates.

Based on this relationship between student loan defaults and dropout rates, there is a clear incentive to support student loan recipients in completing their studies. Not only does it help each student have better outcomes later in life, but all stakeholders stand to benefit, including the schools, financial institutions and wider public policy outcomes.

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