I. Overview

Undergraduate college student borrowing has risen dramatically in recent years. Graduates who received a bachelor’s degree in 20081 borrowed 50% more (in inflation-adjusted dollars) than their counterparts who graduated in 1996, while graduates who earned an associate’s degree or undergraduate certificate in 2008 borrowed more than twice what their counterparts in 1996 had borrowed, according to a new analysis of National Center for Education Statistics data by the Pew Research Center’s Social & Demographic Trends project.

Increased borrowing by college students has been driven by three trends:

  • More college students are borrowing. In 2008, 60% of all graduates had borrowed, compared with about half (52%) in 1996.
  • College students are borrowing more. Among 2008 graduates who borrowed, the average loan for bachelor’s degree recipients was more than $23,000, compared with slightly more than $17,000 in 1996. For associate’s degree and certificate recipients, the average loan increased to more than $12,600 from about $7,600 (all figures in 2008 dollars).
  • More college students are attending private for-profit schools, where levels and rates of borrowing are highest. Over the past decade, the private for-profit sector has expanded more rapidly than either the public or private not-for-profit sectors. In 2008, these institutions granted 18% of all undergraduate awards, up from 14% in 2003.2 Students who attend for-profit colleges are more likely than other students to borrow, and they typically borrow larger amounts.

Other key findings from the Pew Research analysis:

  • One-quarter (24%) of 2008 bachelor’s degree graduates at for-profit schools borrowed more than $40,000, compared with 5% of graduates at public institutions and 14% at not-for-profit schools.
  • Roughly one-in-four recipients of an associate’s degree or certificate borrowed more than $20,000 at both private for-profit and private not-for-profit schools, compared with 5% of graduates of public schools.
  • Graduates of private for-profit schools are demographically different from graduates in other sectors. Generally, private for-profit school graduates have lower incomes, and are older, more likely to be from minority groups, more likely to be female, more likely to be independent of their parents and more likely to have their own dependents.
  • Although private for-profit schools specialize in different fields of study than do public and private not-for-profit schools, the differences in borrowing patterns persist within fields of study. For almost every field of study at every level, students at private for-profit schools are more likely to borrow and tend to borrow larger amounts than students at public and private not-for-profit schools.

About this Report

The total loan amounts in this report are intended to capture the total debt students incurred for their degrees, from enrollment to graduation, so the analysis is limited to students who completed their degrees. It is based on publicly available data published by the U.S. Department of Education’s National Center for Education Statistics. The National Postsecondary Student Aid Study (NPSAS) collects student-level information based on federal financial aid records, college and university records, and student interviews. It is conducted every four years and is nationally representative of schools that participate in federal financial aid programs. The Integrated Postsecondary Education Data System (IPEDS) collects institution-level data annually from nearly every institution of higher education that participates in federal financial aid programs. All years in the report are academic years, identified by the later calendar year. For example, 2008 refers to the 2007-2008 academic year. Appendix A describes the data sources and methodology in more detail.

This report was edited by Paul Taylor, executive vice president of the Pew Research Center and director of its Social & Demographic Trends project. The report also benefited from comments by Rakesh Kochhar and Mark Hugo Lopez of the Pew Research Center and Jacqueline King of the American Council on Education. The report was copy-edited by Marcia Kramer of Kramer Editing Services and number-checked by Daniel Dockterman of the Pew Research Center.