CHARTS YOU CAN TRUST
Based on recently released data from the U.S.
Department of Education’s National Postsecondary
Student Aid Survey (NPSAS) and an analysis of the past
15 years of NPSAS data, the following charts show just
how much higher education debt is increasing, as well
as identify several reasons for the surge and what steps
policymakers can take to help students attend college
without drowning in debt.
REACHING NEW HEIGHTS
Higher education debt has reached unprecedented
heights. Chart 1 shows the percentage of all full-time
undergraduates who received student loans, broken down
Charts You Can Trust
Drowning in Debt:
The Emerging Student Loan Crisis
by Erin Dillon and Kevin Carey
July 9, 2009
Higher education has never been more expensive.
The price of attending a public university doubled,
after inflation, over the last two decades, and
family income and student financial aid haven’t kept
pace.1 As a result, students have no choice but to borrow,
and more college students are borrowing more money
than ever before.
But a new analysis of federal financial aid records reveals
more than just surging debt levels. Students are taking
on more of the riskiest debt: unregulated private student
loans. Here, students have the least protection and pay
the highest rates. For-profit colleges are leading the way
in this trend, and minority college students appear to be
borrowing a disproportionate share. If this continues, the
consequences will be severe: reduced access to higher
education, diminished life choices, and increasing rates of
catastrophic loan default.
There are many culprits to this emerging student
loan crisis: out-of-control tuition increases, lack of
commitment to need-based financial aid, and states and
universities increasingly spending scarce financial aid
dollars on wealthy students. President Obama recently
proposed reforming the federal student loan program by
having all students borrow directly from the government.
The money saved from