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New NCES Study Examines Student Loan Debt Burden of Noncompleters

April 16, 2013

Most recent reports on federal student loan debt have focused on the borrowing patterns of students who graduated from their institutions. But according to "Federal Student Loan Debt Burden of Noncompleters," an issue brief from the National Center for Education Statistics (NCES), a substantial share of students leave higher education without a degree or certificate, and the loan debts and debt repayment burdens for these noncompleters are often substantially higher than those carried by people who complete their educational programs.

Overall, 36 percent of all undergraduates who entered postsecondary institutions in 2003-04 left without a degree or certificate by 2009. The share of noncompleting students varied considerably by institution type, ranging from 19 percent at four-year private nonprofit colleges and universities to 46 percent at both two-year public (community) colleges and private for-profit (proprietary) institutions (four-year and less than four-year combined).

Completers Compared with Noncompleters

Generally speaking, the completers and noncompleters borrowed federal student loans at roughly the same rate at the same type of institution. For example, roughly 86 percent of noncompleters who began their higher education programs at proprietary institutions had received at least one federal student loan while they were in school, as had 88 percent of completers. At four-year private nonprofit institutions, a slightly higher share of noncompleters received loans (66 percent) compared with completers (64 percent), but this difference was not statistically significant.

But on a per-credit basis, noncompleters borrowed significantly more on average than those who received certificates or associate's or bachelor's degrees. Among students who entered proprietary institutions, noncompleters had borrowed an average of $350 per academic credit earned, compared with $220 for their counterparts who completed their educational programs. Among undergraduates who began their educational programs at four-year private nonprofit colleges and universities, noncompleters borrowed $190 per credit, versus $120 per credit for completers. Noncompleters also borrowed more than the degree or certificate earners at community colleges ($80 versus $70), but this difference was not significant.

Trends in Student Loan Debt Burden

In addition, the median debt burden (defined by NCES as the ratio of borrowers' cumulative federal student loan debt to their annual income) among noncompleters in 2009 was 35 percent for all noncompleters, and ranged from 26 percent for those who started at community colleges to 51 percent for those who first attended four-year proprietary institutions. Similar data for completers is not provided by NCES, but it is likely that these students' debt burdens was lower because noncompleters in 2009 had lower incomes when they left postsecondary education than did degree or certificate recipients at all four institution sectors.

The debt burdens of noncompleters also appear to have increased considerably over the past decade. From 2001 (based on students who began their educational programs in 1995-96) to 2009, the debt-to-income ratio of noncompleters rose from 24 percent to 35 percent. Among nondegree recipients at for-profit institutions, the debt burden of those who did not finish their higher education studies jumped from 20 percent to 43 percent, while at four-year private nonprofit schools the debt burden among noncompleters rose from 35 percent to 51 percent.

There was also a noticeable share of noncompleters who had student loan debts that exceeded their annual incomes. In 2009, 31 percent of those who attended proprietary institutions but did not finish their educational programs had debt burdens that exceeded 100 percent. About 21 percent of noncompleters from four-year private nonprofit institutions and 7 percent of those who first attended community colleges had debt burdens of more than 100 percent.

The full NCES issue brief is available at no charge from the NCES Web site


Ken Redd
Director, Research and Policy Analysis