College Board, TICAS Reports Consider Student Debt Loads

October 28, 2016

By Bill DeBaun, Director of Data & Evaluation

Two recently released reports examine recent college graduates’ debt and find it to be rising. The Institute for College Access & Success (TICAS)’s “Student Debt and the Class of 2015” and The College Board’s “Trends in Student Aid 2016” (“Trends”) are both the most recent iterations in long-standing series examining postsecondary fiscal metrics. The two reports’ findings mostly dovetail but do not completely agree about the extent of the debt carried by college graduates. Other ancillary findings will also be of interest to NCAN members.

The TICAS report estimates that 68 percent of bachelor’s degree recipients at four-year public and private, nonprofit institutions in the 2014-15 academic year had student loan debt. That debt averaged $30,100, an increase of 4 percent over the 2013-14 academic year. Trends found that 61 percent of 2014-15 bachelor’s degree recipients at four-year public and private, nonprofit institutions had loan debt and owed an average of $28,100 at graduation. This is also a 4-percent increase over the 2013-14 academic year, as documented in "Trends in Student Aid 2015."

The Trends report provides some ammunition against the common narrative that most students are taking on crushing amounts of debt. In 2015, 90 percent of all undergraduate borrowers were carrying less than $40,000 in debt; unsurprisingly, debt loads for graduate borrowers were much higher, and 43 percent were carrying more than $40,000 in debt. Note that research has found that students with the smallest loan debts are the most likely to default. University of Michigan professor Susan Dynarski notes, “Defaults are concentrated among the millions of students who drop out without a degree, and they tend to have smaller debts. That is where the serious problem with student debt is.”

The total aid composition of grants (55%), loans (36%), and “other” sources (9%), namely Federal Work-Study and federal education tax credits and deductions, shows that the prevalence of grants and loans continued to diverge in the 2015-16 academic year. In the mid-2000s, the percentage of loans was greater than that of grants, but the two figures flipped in the 2009-10 academic year, and the gap between them has grown ever since. “Other aid” has held mostly steady in the past eight years.

The amount of grant aid (including federal, institutional, private and employer, and state grants) has grown steadily over the past twenty years. In 1995-96, the average undergraduate received $3,590 in grant aid; 10 years later that figure was $5,250, and four years after that it was $7,640. In the 2015-16 academic year, the average undergraduate received $8,390. All of the preceding figures are in 2015 dollars. Some of this rise is attributable to the substantial increase for the 2009-10 academic year, but in 2015-16, just 34 percent of grant aid came from the Pell Grant program, which has lost ground in recent years to institutional grants.

The above finding is unfortunate for the low-income, first-generation students predominantly served by NCAN member organizations, to whom institutional grants are poorly targeted. According to an NCAN analysis of the National Postsecondary Student Aid Survey 2012 (NPSAS), institutional merit aid was increasingly more likely to flow to higher-income students. Considering all institutional grant aid, not just merit aid, students from low-income families were more likely to receive institutional grants of $2,700 or less while students from higher-income families were more likely to receive institutional grants of more than that.

The new reports also show that on the loan side, students borrowed a total of $106.8 billion in 2015-16, down from a peak of $124.2 billion in 2010-11. Unsubsidized federal loans (48%) comprised the largest percentage of the pie, followed by subsidized loans (22%). Parent PLUS loans have grown to 11 percent (after hovering at 8-10% for the past decade), while nonfederal loans comprise 10 percent of all loans for the second year in a row. As NCAN members know, both the terms and protections for Parent PLUS and nonfederal loans are inferior to federal subsidized and unsubsidized loans. Their growth is concerning, especially given a recent finding that 11 percent of Stafford Loan borrowers took out less than the maximum amount of federal loans while also taking out private loans.

Recent reports also consider state-level conditions. The TICAS report includes a chart by state of graduates’ debt and the percentage of graduates who had debt. New Hampshire, Pennsylvania, Connecticut, Delaware, and Rhode Island topped the list of “high-debt states,” while Utah, New Mexico, California, Wyoming, and Florida headed up the “low-debt” states.

Meanwhile, another College Board report, “Trends in College Pricing 2016,” considers tuition and fees at the national, regional, and state levels:

  • Nationwide, average published in-state tuition and fees for four-year public institutions rose $230 (2.4%) to $9,650 for 2016-17 academic year. Including room and board, the average charge is $20,090.
  • Out-of-state tuition and fees at the average four-year public institution rose 3.6 percent, or $860, to $24,930, or $35,370 including room and board.
  • Average published tuition and fees at four-year, private, nonprofit institutions also rose 3.6 percent ($1,150) to $32,330, or $45,370 including room and board.
  • Among two-year public institutions, in-district tuition and fees rose $80 (2.3%) to $3,520.

Regionally, Midwest and New England states were more expensive than other regions, in terms of tuition, fees, and room and board. At the state level, the report finds considerable variation in tuition and fees by sector. Figures 6, 7, and 8 will be particularly useful for members wanting to know where their state falls.

Overall, these reports are important references for members wanting to know more about the condition of postsecondary debt, aid, and pricing. NCAN will continue to review these materials to provide more takeaways for members. 

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