Giving Compass' Take:

• Student loans have become an all too common crisis in America and other parts of the globe. The author breaks down how to solve this crisis by creating a cost-effective solution.

• The author proposes creating incentives for graduating and defines the role philanthropists can play. How could this fit into your giving strategy?

• Learn more about aiding student loans. 

We have all read about the student loan crisis. A trillion dollars plus in outstanding debt etc. Most people do not know there is a 46% dropout rate among students. Why is this important? It means that nearly half of all financial contributions made to students in higher education can be dissipated producing no graduates. How much money are we talking about? How about $11 billion annually through grants and scholarships.

Students still must take out some level of student loan for education and those students who do not receive a grant or scholarship use a student loan to pay for 100% of their education. That is 70% of all students entering school with an average loan of $32,000. Remember that ALL students are subject to the 46% dropout rate. So why the high dropout rate? You can speculate but I believe a big influence is the economic uncertainty facing them in the future. It is hard enough to face uncertainty but try doing it laden down with debt. Our economy cannot provide any guarantee of future earnings to most students graduating regardless of career choice. Add to this the necessity for education to remain competitive in the employment market place. This is the space between a rock and a hard place. So, what do we do?

Read the full article about solving student loan debt by Jason A Summers at Medium.