Although student debt increased rapidly for students in some sectors of higher education during the last four years, the amount of debt accumulated by graduates of public and private four-year colleges grew relatively slowly from 2003-04 to 2007-08. Still, a growing minority graduate with excessive debt. This information and other insights are the focus of a policy brief released yesterday by the College Board based on new data from the U.S. Department of Education's National Postsecondary Student Aid Study (NPSAS).

How Much Are College Students Borrowing? reveals that among all students who completed a degree - associate, bachelor or certificate - in the 2007-08 academic year, 41 percent graduated with no debt. Among all students, those completing any undergraduate degree with education debt increased from 54 percent in 2003-04 to 59 percent in 2007-08. The most rapid increases were within the for-profit sector and for all students earning certificates and two-year degrees.

The median debt level of 2007-08 bachelor's degree recipients at public four-year colleges was $17,700, a 4 percent ($710) increase in inflation-adjusted dollars over five years. The median debt level of 2007-08 bachelor's degree recipients at private four-year institutions was $22,375, which is a 5 percent ($1,137) increase in inflation-adjusted dollars over five years.

"Many students borrow at some point in their college careers, but not every year," said Sandy Baum, coauthor of the policy brief and senior policy analyst at the College Board. "Borrowing moderately is a responsible way to pay for college, but students should consider how much they can expect to earn when they graduate and whether they will be able to afford the required monthly payments."

Much of the growth in borrowing evident in 2007-08 occurred in the private nonfederal loan market.

About 10 percent of all bachelor's degree recipients in 2007-08 borrowed $40,000 or more and the proportions were much higher at private and for-profit institutions.

Among students earning associate degrees, the share of students borrowing increased 8 percentage points in both the public two-year and for-profit sectors between 2003-04 and 2007-08. For students who completed a certificate, the percent who borrow increased from 18 to 30 percent in the public two-year sector, and from 85 to 90 percent in the for-profit sector.

Patricia Steele, coauthor of the policy brief and an analyst at the College Board, said, "There is reason to be concerned about those who borrow far more than the average amount. Students who complete a degree with excessive debt face burdensome repayment obligations."

Media Coverage

In Study, Most Graduates' Debt Load Is Manageable The New York Times

Larger Share of Students Graduate With Education Debt The Chronicle of Higher Education

Posted 08/12/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.