Students leave college with higher debt to pay

KANSAS CITY, Mo. – The average student debt for bachelor’s degree graduates mushroomed 50 percent from 1996 to 2008, according to a new report.

Over the same time frame, debt for associate-degree graduates grew to twice the amount of their 1996 counterparts.

Analysis of National Center for Education Statistics data by the Pew Research Center’s Social & Demographic Trends Project found that the higher debt loads were driven by three trends:

• More students borrowed – 60 percent of graduates in 2008, compared to 52 percent of graduates in 1996.

• Students borrowed more – 2008 bachelor’s degree recipients borrowed an average of $23,000 compared to $17,000 in 1996 (inflation-adjusted to 2008 dollars), and associate degree recipients borrowed an average of $12,600 compared to $7,600.

• More students attended for-profit schools that had higher tuition.

The final point indicates loan-repayment difficulty.

The Pew study found that, over the past decade, enrollment in private, for-profit schools outpaced enrollment in public or nonprofit schools and that students enrolled in for-profit schools were more likely to borrow money.

For-profit schools granted 18 percent of all undergraduate degrees in 2008, up from 14 percent in 2003.

The report said one-fourth of for-profit school graduates borrowed more than $40,000, compared with just 5 percent of public school graduates and 14 percent of nonprofit school graduates.

One takeaway from the study:

“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,” Pew reported.

“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.”