The Higher Education Bubble is bursting, and the hardest hit Americans will likely be those who cannot afford to complete their degree programs.

Via Instapundit: The Wall Street Journal writer Ben Casselman takes a detailed look at the complex economic factors impacting millions of troubled scholars.

The rising cost of a college education is hitting one group especially hard: the millions of students who drop out without earning a degree.

A bachelor’s degree remains by far the clearest path to the American middle class. Even today, amid mounting concerns about the rising cost of higher education and questions about the relevance of many college degrees, recent graduates have lower rates of unemployment, higher earnings and better career prospects than their less educated peers.

But as more Americans than ever before attend college, more too are dropping out before they ever don a cap and gown. That means millions of Americans are taking on the debt of college without getting the earnings boost that comes from a degree. Dropouts are more than four times as likely as graduates to default on their student loans.

“Graduating with a lot of debt can be daunting,” says Lauren Asher, president of the Institute for College Access and Success, an advocacy organization promoting access to higher education. “Having a lot of debt and not graduating is even more daunting.”

Students who don’t graduate with some sort of credential or degree, they are the ones who are having the most problems repaying,” said Alisa Cunningham, one of the study’s authors. “It doesn’t even have to be a really high amount of loans. It’s just that they get in trouble because they have their daily lives they have to pay for.”

According to the U.S. Department of Labor, 34 million Americans over 25 years old have some college credits but haven’t received a diploma, a rate that grew by roughly 700,000 people over the past three years.

Meanwhile, the rising cost of college is forcing many students to work long hours, which has been shown to reduce the odds of completing a degree, and is leading others to quit school outright. Ever-higher debt burdens heighten the consequences for those who drop out, making it harder for them to borrow money to buy a house or a car or to go back to school later on.

The complexity of the student-loan system—a web of public, private and subsidized loans that together add up to more than $1 trillion—makes it difficult to know exactly how much debt is held by dropouts. But the scale is massive. According to a 2011 study by the Institute for Higher Education Policy, a Washington, D.C.-based research firm, 58% of the 1.8 million borrowers whose student loans were began to be due in 2005 hadn’t received a degree. Some 59% of them were delinquent on their loans or had already defaulted, compared with 38% of college graduates. The problem has almost certainly worsened since, as the recession wiped out job opportunities for less-educated workers.