Giving Compass' Take:
- Sandy Baum examines data on student loan debt and argues that policymakers must consider racial and economic background to provide assistance to students who need it most.
- What can you do to advocate for financial assistance or debt reduction for marginalized students?
- Learn about how student loan debt has worsened the wage gap for Black women.
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Public discourse raises the alarm about mounting student debt with a focus on the total amount of debt outstanding, but the amounts students are borrowing are actually decreasing. In fact, when adjusted for inflation, aggregate annual borrowing and average loans per student have declined every year since 2010–11, while the share of students graduating with any debt declined for certificate, associate degree, and bachelor’s degree graduates between 2012 and 2020. However, even with these gains, policymakers need to consider the individual students and the burdens they bear when designing public policy.
New data from the 2019–20 National Postsecondary Student Aid Study reveal how much undergraduate students are borrowing and how those patterns differ across certificate and degree programs, sectors, race and ethnicity, and students’ financial circumstances.
Although the dramatic increase in students graduating with high levels of debt between 2000 and 2012 did not continue in the following decade, this leveling off has not occurred equally for all groups of students. Debt levels have continued to increase for those earning certificates, those attending for-profit institutions, Black students, and to some extent, Asian students.
Defining high levels of debt is subjective. For my analysis, I use a threshold of $15,000 in 2020 dollars for certificate and associate degree recipients and $30,000 in 2020 dollars for bachelor’s degree recipients. In 2000, between 2 and 3 percent of graduates held these amounts of debt, whereas between 16 and 24 percent did 12 years later. (These debt levels include federal and nonfederal student loans, but not loans to parents).
The share with high debt did not increase measurably for associate and bachelor’s degree recipients between 2012 and 2020. But it did continue to grow (more slowly than before) for certificate recipients from all sectors, all racial and ethnic groups, and both Pell recipients and (more slowly) nonrecipients.
Although the shares of associate and bachelor’s degree recipients with high debt did not increase measurably, the share of bachelor’s degree recipients with very high debt (more than $50,000) did grow from 6 percent in 2012 to 10 percent in 2020.
Read the full article about student loan debt and equity by Sandy Baum at Urban Institute.