Report: Student Loan Borrowing Reaches New High Among More Affluent Students

By Brittany Hackett, Communications Staff 

2012 was a record year for student loan debt among new college graduates, with the largest increase in borrowing occurring among more affluent families, according to new data from the Pew Research Center.

The data used in the analysis is based on the National Postsecondary Student Aid Study and covers undergraduates who had recently completed a bachelor’s degree in one of three classes – 1992-93, 1999-00, and 2011-12, which is the most recent batch of data.

When each class of graduates is compared, 69 percent of the class of 2011-12 took out student loans to pay for their education, representing a dramatic increase from the class of 1992-93 when only 49 percent of graduates borrowed. The class of 1990-2000 had a borrowing rate of 62 percent. Furthermore, the amount of debt students are graduating with has almost doubled, increasing from a typical amount of $12,434 in 1992-93 to $26,885 in 2011-12.

While low-income families continue to have the highest rates of borrowing, high-income families have shown the largest growth in borrowing over that last two decades.

According to the Pew analysis, 50 percent of high-income families borrowed money for college in 2012, about twice as many as in 1992-93 (24 percent) and slightly more than in 1999-00 (45 percent). Upper-middle-income graduates also had an increase in borrowing, jumping to 62 percent in 2012 from 34 percent in 1992-93 and 60 percent in 1999-2000.  Seventy-seven percent of low-income students graduated with debt in 2012, compared to 67 percent in 1992-93 and 69 percent in 2011-12.

The study offers some factors that may contribute to the increase in debt among high-income families, including: 

  • The larger pool of student loan borrowers that has resulted from expanded eligibility for federal loan programs;
  • The smaller role non-federal and private loans play after the recent financial crisis;
  • The decline in household wealth since the Great Recession; and 
  • A curtailing in available borrowing from other sources since the financial crisis.

Other Findings

The Pew analysis also revealed a 50 percent increase in student borrowing among graduates with more educated parents, with 61 percent of 2012 students having parents who also took out debt to pay for their education. Students whose parents have less education saw a smaller increase in borrowing, though they still remain more likely to borrow.

Female graduates are also more likely to borrow money to pay for their education than males, 71 percent to 67 percent in 2012. The difference “may reflect the fact that female college students and graduates tend to be from more disadvantaged family backgrounds than their male counterparts,” Pew said in the analysis.


Publication Date: 10/10/2014

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