5 facts about student loans
Last edited Tue Apr 12, 2022, 09:38 AM - Edit history (1)
I was asked to make this an OP since there is much discussion, and misinformation, about the issue.
1. SIX PERCENT OF BORROWERS OWE A THIRD OF ALL THE OUTSTANDING DEBT.
A very small fraction of all student loan borrowers have very large loans. Six percent of borrowers owe more than $100,000 in debt, with 2 percent owing more than $200,000. This 6 percent owes one-third of the outstanding $1.5 trillion of debt. At the other extreme, 18 percent of borrowers owe less than $5,000 in student loan debt. They collectively owe 1 percent of the debt outstanding.
2. ABOUT ONE QUARTER OF STUDENT LOAN BORROWERS, WHO HAVE ABOUT HALF THE DEBT OUTSTANDING, BORROWED FOR GRADUATE SCHOOL.
Out of all households with student debt, only 26 percent are headed by an individual with a graduate degree. While only a small share of households with student debt have a graduate degree, loans associated with graduate degrees account for 50 percent of the total outstanding student loan debt. In contrast, 42 percent of households with student debt are headed by someone without a bachelor’s degree; they only account for ¼ of the total outstanding debt.
3. INDIVIDUALS WHO OWE THE MOST ARE NOT THE INDIVIDUALS WHO DEFAULT ON DEBT.
Borrowers with graduate degrees have the lowest default rates despite accounting for about half of all student debt. Higher default rates are more common for students who went to for-profit institutions. Forty percent of borrowers from for-profit two-year programs default on their loans within five years of entering repayment, and 32 percent of those who went to for-profit four-year programs defaulted in this same time frame. Among students who went to public community colleges, about 25 percent default within five years of entering repayment. Defaults are much less frequent among those who borrowed to go to public or private non-profit four-year schools.
(My note here: The Biden administration has focused a lot of their forgiveness on these loans.)
4. MOST BACHELOR’S DEGREE RECIPIENTS GRADUATE WITH LITTLE TO NO DEBT.
Thirty percent of all bachelor’s degree recipients graduate with no debt, and another 23 percent graduate with less than $20,000 in loans. Fewer than 20 percent of all borrowers owed more than $40,000. Among for-profit schools, nearly half of all borrowers owed more than $40,000, but only 12 percent of those who attended four-year public colleges owed the same amount.
5. EVEN IF FINANCIAL AID COVERS THE WHOLE TUITION BILL, MANY STUDENTS STILL BORROW TO COVER LIVING COSTS.
Many students borrow to not only cover their tuition and fees but also to get cash to finance the cost of living while they are in school. An Urban Institute analysis conducted using the National Postsecondary Student Aid Study finds that student borrowing patterns among those for whom all tuition is covered by scholarships and grants (no net tuition) are similar to those who have to pay tuition. For students at public universities and colleges with no net tuition, 22 percent borrow $30,000 or more; on average, they borrow $24,000. In comparison, 23 percent of those who pay average net tuition of more than $5,000 borrowed $30,000 or more; on average, they borrow $28,000.
https://www.brookings.edu/blog/up-front/2019/11/12/five-facts-about-student-loans/
= new reply since forum marked as read
Thanks for posting this, mcar. Very helpful.
One of our grandsons is facing having to choose a public instead of a name private university if he doesn't get enough covered by scholarships, and not happy, but the differences in tuition, etc, are enormous.
I'm hoping, of course, that voters, including those here, will elect Democratic majorities to make public education affordable before he graduates high school, or at least before he has to borrow. And big NO to $100K+ for anything but private, for-profit colleges.
able to go for what he really wanted though, PJ, and is mostly doing well. That at least worked as it should.
And, frankly, relieved to hear that it wasn’t debt run up at a state university. Some red state governments are so corrupt these days they have wrapped predatory exploitation and suppression of education into their new “conservative” ideology.
💙💛
