A new report by the College Board examines what education-loan debt looks like for graduates of different kinds of institutions.
The report, “How Much Are College Students Borrowing?,” breaks down the most recent data from the U.S. Education Department’s National Postsecondary Student Aid Study by institution type, and finds that debt levels have increased rapidly for students in the for-profit sector as well as in certificate and associate-degree programs, while rising by a smaller amount for graduates of public and private nonprofit four-year colleges.
The report also looks at median debt and at the percentages of graduates who borrowed at different levels, ranging from less than $10,000 to $40,000 or more.
First, the report notes, a large share (41 percent) of students who graduated in 2007-8 had no education-loan debt. Thirty-four percent of bachelor’s-degree recipients, 52 percent of associate-degree recipients, and 37 percent of students who earned certificates had no education debt.
“A substantial share of college graduates still today borrow nothing,” said Patricia Steele, an education policy analyst with the College Board and one of the authors of the report. “The majority of students are really borrowing what we would call a moderate level of debt.”
Among those graduates who did borrow, debt levels varied by institution type. For example, 10 percent of students at four-year public institutions had $40,000 or more in loans, while 22 percent of graduates of private four-year institutions and 25 percent of students graduating from for-profit four-year institutions had that level of debt. A quarter of graduates of public four-year institutions who borrowed had less than $10,000 in debt.
At two-year colleges, only 2 percent of graduates of public institutions who borrowed had $40,000 or more in loans, while 6 percent of those at for-profit institutions borrowed at that level. Sixty-one percent of graduates of public two-year colleges and 22 percent of those at for-profit two-year colleges had borrowed less than $10,000.
The report also found that the proportion of graduates with student-loan debt has grown, from 54 percent in 2003-4 to 59 percent in 2007-8.
Growth in Borrowing for 2-Year Colleges
The proportion of graduates of public two-year colleges with debt grew considerably, to 38 percent, up from 30 percent in 2003-4. At public two-year certificate programs, the proportion of graduates with debt grew to 30 percent in 2007-8, from 18 percent in 2003-4.
Ninety-six percent of students who graduated from four-year for-profit institutions in 2007-8 borrowed, up from 85 percent in 2003-4. At two-year for-profit institutions, 98 percent of students who graduated in 2007-8 borrowed, up from 90 percent in 2003-4. And for graduates of for-profit certificate programs, 90 percent borrowed in 2007-8, up from 85 percent in 2003-4.
The proportion of graduates with debt stayed the same for public and private four-year colleges.
Among all graduates who borrowed, the median loan debt has risen 11 percent, from $13,663 in 2003-4 to $15,123 in 2007-8. Median debt increased by 44 percent for graduates of public two-year certificate programs, 30 percent for graduates of for-profit certificate programs, and 23 percent for graduates of for-profit four-year programs.
While the report focuses on the debt of graduates, it also includes a chart on all students who borrowed in 2007-8. Because not every student who borrows money for college takes out a loan every year, a larger percentage of students graduate with debt than borrow each year. Thirty-nine percent of all students and 54 percent of full-time students borrowed in 2007-8. Among full-time students, the average federal loan per borrower was $5,432, and the average private loan per borrower was $7,809.
Over all, 50 percent of full-time students took out a federal loan in 2007-8, and 19 percent took out a private loan. Students at for-profit institutions were those most likely to borrow from private lenders, but students at private nonprofit four-year institutions took on the largest average private loans.
The loan data does not include parent PLUS loans, loans from family members and friends, state or institutional loans, or credit-card debt. While the National Postsecondary Student Aid Study is considered the best source of information on private education debt, its information on nonfederal loans comes primarily from interviews with students and is not always verified by institutions and may not be complete.