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New Report Shows Students' Financial Woes Endangering Graduation Rates

New York, NY  A growing number of young students are turning to more affordable community colleges for their higher education, but only an alarming two out of five finish a degree within six years of enrollment, according to a new report published today.

Work Less, Study More & Succeed: How Financial Supports Can Improve Postsecondary Success shows that, while a postsecondary education provides an essential step towards the middle class, it has become financially out of reach for many American families. College costs-including tuition, fees and living expenses-have risen dramatically over the last decade but financial aid hasn't kept pace. As a result, the majority of young community college students enroll in school only part time and often work more than 20 hours per week, endangering their ability to focus on their studies and vastly extending the time it takes to earn a degree, if at all.

"Community Colleges are a cornerstone of the American educational experience, and a key path to a financially stable middle-class life for new generations of young Americans," said Nancy K. Cauthen, the report's co-author and Director of Demos' Economic Opportunity Program. "But far too many qualified young people — especially those who are low- or moderate-income-don't receive the financial supports needed to be successful in college. And for those who do have those supports, they don't stretch far enough."

Work Less, Study More & Succeed comes on the heels of the Student Aid and Fiscal Responsibility Act of 2009 (H.R. 3221), which would significantly overhaul the financial aid system and provide billions of dollars for increased grant and loan aid by ending wasteful subsidies to student lenders. It would also fund most of the President's American Graduation Initiative, which would "increase the effectiveness and impact of community colleges, raise graduation rates, modernize facilities, and create new online learning opportunities" by 2012. The House of Representatives recently passed this bill and it's now waiting consideration by the Senate.

The report highlights key trends among community college students that underscore the urgency for these reforms:

  • Even after accounting for all financial sources, full-time, full-year community college students from families with the lowest incomes averaged $6,500 of unmet need per year; students from the lower-middle income quartile had an average unmet need of nearly $5,000.
  • To finance their educations, 58 percent of young community college students enroll in school only part time, and 61 percent work more than 20 hours per week. Yet research clearly indicates that full-time enrollment and part-time employment of 15 hours or less per week provides the optimal situation for young students to concentrate on their studies and finish their degree.
  • Surveys of students who have left college without earning a credential routinely cite employment and finances as the main reasons for student departure: one study found that nearly 40 percent of students who worked full time while enrolled dropped out within three years, compared to 19 percent of students who worked part time and 13 percent who did not work. Part-time enrollment appears to increase the risk of departure even more than employment.
  • The bottom line is, though more of today's young adults are motivated to seek a postsecondary education, too many of them are sidelined by the financial burden of paying for school while meeting their other financial obligations," said Viany Orozco, the report's co-author and a policy analyst in the Economic Opportunity Program at Demos. "We must reform financial aid and provide additional financial supports to help students cover more of the costs of school and their living expenses so that they can work less, study more, and finish their degrees."

Work Less, Study More & Succeed was made possible by generous support from the Bill & Melinda Gates Foundation. To read the report, visit

Hard copies of the report will be available at Demos' second annual "A Better Deal: Securing Our Economic Future NOW" conference-a gathering of young leaders and other stakeholders from around the country to discuss the pressing economic issues they face. Washington DC, October 15–16, 2009. Richard Trumka, President of the AFL-CIO, will provide the Keynote. More information at