Graduates As Debtors
By Jennifer Saranow Schultz
May 1, 2010
The College Board, in a new report, found that bachelor's degree recipients who graduated with the most student debt tended to be those who went to for-profit institutions or were independent -- meaning they generally did not get support from their parents.
The findings in the report, ''Who Borrows Most? Bachelor's Degree Recipients with High Levels of Student Debt,'' released on Monday, were based on an analysis of government data about postsecondary student aid for students who received their bachelor's degrees in 2008, the most recent figures available.
The report found that about two-thirds of college students graduated with debt. But the researchers specifically examined who had taken on the most debt, meaning the students who had borrowed more than $30,500 cumulatively for their degree. On average, the group studied had debt of $45,700.
''We just wanted to know who are these students with the greatest debt,'' said Patricia Steele, a co-author of the report and research consultant to the College Board.
Researchers said the study had implications for public policy decisions regarding topics like student financial literacy and protection provisions for students in extreme high-debt situations.
Among the report's major findings was that the frequency of high debt was twice as high among independent students as among dependent students. Independent students are generally older, married or orphans, among other characteristics.
Twenty-four percent of independent students graduating with a bachelor's degree in 2008 had at least $30,500 of debt, the report found.
Among dependent students, meanwhile, the researchers found that there was no statistically significant relationship between debt level and income.
In addition, high debt is most common among students who graduated from for-profit institutions (think DeVry or other similar schools that have shareholders; private businesses; or schools that offer more vocational training).
In addition, 65 percent of borrowers obtaining their degrees from such schools had an average of $11,300 in private debt on top of federal student loans. The private, nonfederal, loans tend to have higher interest rates and fewer repayment protections than federal loans.
The highest concentration of nonfederal debt - where 70 percent of the debt is nonfederal -- is among dependent students from families with incomes of $100,000 or higher, the report found. Many of those students may never have applied for federal financial aid and, therefore, were not offered federal loans.
The report also found that debt might be more prevalent among black degree recipients than those from other racial and ethnic groups, while dependent white and Asian degree recipients might have higher average private debt than black and Hispanic students.
The report, however, did not look at whether students were having problems repaying their debt.
Do the results surprise you? Why or why not?