Bachelor’s Degree Recipients Have High Levels of Student Debt

May 4, 2010

According to a new study by the College Board, about 17 percent of all four-year college and university bachelor's degree recipients borrow student loan amounts that are likely to cause them difficulties, particularly if their earnings are either below average or unusually uneven over time. Using data from the National Postsecondary Student Aid Study (NPSAS), the report provides a description of these high-debt students.

The data reveal that high undergraduate debt levels are much more common among independent students (generally, students 24-years old and older whose parents did not contribute substantially to their postsecondary expenses) than financially dependent students. Within this group, 24 percent graduated with at least $30,500 of debt in 2007-08. Dependent students from families with annual incomes of $100,000 or higher are less likely than others to graduate with high levels of debt. Overall, these data indicate that debt levels are not closely correlated with family income for dependent students, and that middle-income students are somewhat more likely than lower-income students to accumulate high debt levels.

Additionally, students who graduated from for-profit (proprietary) institutions are much more likely than students from other sectors to have high debt levels. Fifty-three percent of the bachelor's degree recipients at for-profit institutions had a cumulative total debt of $30,500 or more, compared with 24 percent of those at private not-for-profit colleges and universities, and 12 percent at public four-year institutions.

High debt is more common among African American bachelor's degree recipients than among those from other racial/ethnic groups. Twenty-seven percent of 2007-08 black bachelor's degree recipients borrowed $30,500 or more, compared with: 16 percent of white, non-Hispanics; 14 percent of Hispanics/Latinos; and 9 percent of Asian/Pacific Islanders. One reason African American students borrowed more is that they tended to travel out of their respective states of residence to attend Historically Black Colleges and Universities.

The report authors conclude: "while it is encouraging that it is not students from the lowest-income families who are borrowing most, the data reported here make it clear that students need better information about the postsecondary choices available to them and about responsible borrowing. They need this information before they incur amounts of debt that put them at great risk of future financial insecurity."

A copy of the report is available on the College Board web site.