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STUDENT DEBT
MYTHS AND FACTS
Second Edition
April 2014
The Issue
Student loan debt is now approximately $1 trillion,
and the delinquency rate for student loans has
increased to ...
MYTH
Many students owe
more than $100,000
when they graduate.
FACT
In 2012, only 4% of all
borrowers owed $100,000
or more...
Council of Independent Colleges, April 2014
$11,900 $11,900 $11,700
$13,000
$13,900 $14,300
$19,000
$18,200 $18,000
$19,20...
MYTH
High levels of
student debt make
independent colleges
unaffordable.
FACT
One quarter of students who
graduated with a...
Council of Independent Colleges, April 2014
35%
16%
19%
11%
6%
12%
20%
13%
20%
13%
9%
26%
10%
9%
16%
14%
13%
37%
0% 5% 10%...
MYTH
Only wealthy
families can afford
to send their
children to
independent
colleges.
FACT
Independent colleges
enroll stu...
Council of Independent Colleges, April 2014
35%
12%
14%
11%
15%
14%
32%
13%
14%
11%
14%
16%
32%
12%
13%
12%
14%
15%
23%
12...
MYTH
It is very difficult to
receive financial
aid at independent
colleges.
FACT
A larger proportion of students
at indepe...
Council of Independent Colleges, April 2014
83%
40% 39%
51%
89%
80%
35%
64%
90%
24%
73%
83%
0%
10%
20%
30%
40%
50%
60%
70%...
MYTH
Students at public
institutions get
more financial aid
than students at
independent
colleges and
universities.
FACT
S...
Council of Independent Colleges, April 2014
$19,785
$4,765 $5,134
$6,310
$31,273
$14,826
$5,248
$7,529
$19,515
$2,872
$4,8...
Council of Independent Colleges, April 2014
$1.3 $1.4
$1.5
$1.9
$2.6
$4.7
$10.1
$16.2
$27.9
$0.0
$5.0
$10.0
$15.0
$20.0
$2...
MYTH
All students enrolled
at independent
colleges pay the
same high tuition
(irrespective of
family income).
FACT
On aver...
Council of Independent Colleges, April 2014
68%
51%
58%
75%
88%
91%
58%
47% 48%
55%
61%
68%
83%
80%
83%
90%
96% 95%
0%
10%...
Other factors to consider:
• Over the past decade, tuition and fees at public institutions
have increased twice as fast as...
Council of Independent Colleges, April 2014
0
50
100
150
200
250
300
350
Inflation-AdjustedPublishedTuitionandFees
Relativ...
Council of Independent Colleges, April 2014
32%
51%
57%
52%
62%
65%
36%
40%
42%
0%
10%
20%
30%
40%
50%
60%
70%
Four-year F...
24%
47%
61%
44%
59%
68%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Four-year Five-year Six-year
Public 4-Year Independent 4-Ye...
38%
28%
12%
22%
59%
15%
5%
21%
18%
9% 8%
65%
0%
10%
20%
30%
40%
50%
60%
70%
48 months or less 49-60 months 61-72 months 73...
Council of Independent Colleges, April 2014
5.2% 5.2%
8.3%
9.6%
12.9%
13.6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
FY2010 FY2011
I...
For additional information about these facts and
others that describe the quality and affordability of
independent college...
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Student Debt: Myths and Facts

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The Council of Independent College's new fact sheet, “Student Debt: Myths and Facts,” contains new research to set the record straight by countering myths and providing facts about student debt.

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Transcript of "Student Debt: Myths and Facts"

  1. 1. STUDENT DEBT MYTHS AND FACTS Second Edition April 2014
  2. 2. The Issue Student loan debt is now approximately $1 trillion, and the delinquency rate for student loans has increased to 10 percent. Critics are concerned that student loans may be the next financial bubble to burst and that borrowing for higher education is not worth the financial risks, especially for students who attend private institutions. What is the truth? This presentation examines a number of myths about higher education student finance and sets the facts straight. Council of Independent Colleges, April 2014
  3. 3. MYTH Many students owe more than $100,000 when they graduate. FACT In 2012, only 4% of all borrowers owed $100,000 or more in student debt. The average debt level of bachelor’s degree recipients at independent colleges and universities is $19,500—less than the price of a modest automobile. Council of Independent Colleges, April 2014
  4. 4. Council of Independent Colleges, April 2014 $11,900 $11,900 $11,700 $13,000 $13,900 $14,300 $19,000 $18,200 $18,000 $19,200 $20,000 $19,500 $0 $5,000 $10,000 $15,000 $20,000 $25,000 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 Public 4-Year Independent 4-Year Average Total Student Loan Debt per Bachelor's Degree Recipient Source: The College Board, Trends in Student Aid 2013. Note: All totals are expressed in 2012 dollars.
  5. 5. MYTH High levels of student debt make independent colleges unaffordable. FACT One quarter of students who graduated with a bachelor’s degree from a four-year independent college or university did not have any educational debt. For those who borrowed, the difference between the median debt levels for graduates of public versus independent institutions is only $4,375. Council of Independent Colleges, April 2014
  6. 6. Council of Independent Colleges, April 2014 35% 16% 19% 11% 6% 12% 20% 13% 20% 13% 9% 26% 10% 9% 16% 14% 13% 37% 0% 5% 10% 15% 20% 25% 30% 35% 40% $40,000 or more $30,000 to $39,999 $20,000 to $29,999 $10,000 to $19,999 Less than $10,000 No Debt Public 4-Year Independent 4-Year For-Profit 4-Year Distribution of Total Undergraduate Debt Median Debt of 2011-2012 BA Recipients Who Borrowed: Public 4-Year: $22,625 Independent 4-Year: $27,000 For-Profit 4-Year: $33,900 Source: U.S. Department of Education, National Center for Education Statistics. National Postsecondary Student Aid Study, 2011-2012 (NPSAS:12). Analysis by the Council of Independent Colleges.
  7. 7. MYTH Only wealthy families can afford to send their children to independent colleges. FACT Independent colleges enroll students of all financial backgrounds, and at about the same percentages as public institutions for low- and middle-income students. Council of Independent Colleges, April 2014
  8. 8. Council of Independent Colleges, April 2014 35% 12% 14% 11% 15% 14% 32% 13% 14% 11% 14% 16% 32% 12% 13% 12% 14% 15% 23% 12% 13% 12% 17% 22% 0% 10% 20% 30% 40% $105,000 or more $85,000-104,999 $65,000-84,999 $45,000-64,999 $25,000-$44,999 Less than $25,000 Public Nondoctoral Public Doctoral Private Nondoctoral Private Doctoral Source: U.S. Department of Education, National Center for Education Statistics. National Postsecondary Student Aid Study, 2011-2012 (NPSAS:12). Analysis by the Council of Independent Colleges. Student Enrollment by Family Income
  9. 9. MYTH It is very difficult to receive financial aid at independent colleges. FACT A larger proportion of students at independent colleges receive financial aid than do students at public institutions. Students enrolled at independent colleges are twice as likely to receive grants from their institutions as students enrolled at public institutions, and more than three times as likely as students at for-profit institutions. Council of Independent Colleges, April 2014
  10. 10. Council of Independent Colleges, April 2014 83% 40% 39% 51% 89% 80% 35% 64% 90% 24% 73% 83% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Any Financial Aid Institutional Grants Federal Grants Student Loans Public 4-Year Independent 4-Year For-Profit 4-Year Percent of Undergraduates Receiving Financial Aid Source: U.S. Department of Education, National Center for Education Statistics, Digest of Education Statistics 2012. Note: Percentages for first-time, full-time undergraduates during academic year 2010-2011. “Any Financial Aid” category includes state and local grants.
  11. 11. MYTH Students at public institutions get more financial aid than students at independent colleges and universities. FACT Students at independent colleges receive three times the amount of institutional aid as do students at public institutions, and five times as much as students at for-profit institutions. Independent colleges give students nearly six times as much institutional grant aid as does the federal government. Council of Independent Colleges, April 2014
  12. 12. Council of Independent Colleges, April 2014 $19,785 $4,765 $5,134 $6,310 $31,273 $14,826 $5,248 $7,529 $19,515 $2,872 $4,875 $8,733 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Total Financial Aid Institutional Grants Federal Grants Student Loans Public 4-Year Independent 4-Year For-Profit 4-Year Source: U.S. Department of Education, National Center for Education Statistics, Digest of Education Statistics 2012. Note: Percentages for first-time, full-time undergraduates in aid programs during academic year 2010-2011. “Total Financial Aid” category includes state and local grants. Analysis by the Council of Independent Colleges. Average Amount of Financial Aid
  13. 13. Council of Independent Colleges, April 2014 $1.3 $1.4 $1.5 $1.9 $2.6 $4.7 $10.1 $16.2 $27.9 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 2000-01 2005-06 2011-12 State Federal Institutional GrantAidinBillions Academic Year Source: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System, finance component, various years. Note: Data represents grant aid awarded to students at Title IV, degree-granting, U.S. private nonprofit, four- year institutions. Analysis by the National Association of Independent Colleges and Universities, Private Colleges: FactFile. Independent Colleges Give Students Nearly Six Times as Much Institutional Grant Aid as Does the Federal Government In fact,
  14. 14. MYTH All students enrolled at independent colleges pay the same high tuition (irrespective of family income). FACT On average, the actual amount students pay at private colleges is less than 60 percent of the total cost of tuition, fees, room and board. Students with lower family incomes pay a much lower percentage of the total costs. Council of Independent Colleges, April 2014
  15. 15. Council of Independent Colleges, April 2014 68% 51% 58% 75% 88% 91% 58% 47% 48% 55% 61% 68% 83% 80% 83% 90% 96% 95% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% All income levels $0-30,000 $30,001-48,000 $48,001-75,000 $75,001-110,000 $110,001 or more Public 4-Year Independent 4-Year For-Profit 4-Year Average Net Price as a Percentage of Total Costs by Family Income Source: U.S. Department of Education, National Center for Education Statistics, Student Financial Aid, Academic Year 2011-12: First Look (Provisional Data). Analysis by the Council of Independent Colleges. Note: Total costs include tuition, fees, and room and board on campus for first-time, full-time undergraduates.
  16. 16. Other factors to consider: • Over the past decade, tuition and fees at public institutions have increased twice as fast as at independent institutions; • The graduation rates at independent colleges are much higher than those at public and for-profit institutions, even for low- income students; • Students at independent colleges graduate much sooner (about ten months earlier) than do their peers at public institutions and 48 months earlier than students at for-profit institutions—which means fewer years of paying tuition and a quicker start at earning a salary; and • Graduates of independent colleges are far less likely to default on their student loans. Council of Independent Colleges, April 2014
  17. 17. Council of Independent Colleges, April 2014 0 50 100 150 200 250 300 350 Inflation-AdjustedPublishedTuitionandFees Relativeto1983-84 Inflation-Adjusted Published Tuition and Fees from 1983-1984 to 2013-2014 Source: The College Board, Trends in College Pricing 2013, Figure 5, page 14. Note: Values for published tuition and fees by sector, adjusted for inflation, as a percentage of 1983-1984 published prices. Public 4-Year 331 Public 2-Year 264 Independent 4-Year 253
  18. 18. Council of Independent Colleges, April 2014 32% 51% 57% 52% 62% 65% 36% 40% 42% 0% 10% 20% 30% 40% 50% 60% 70% Four-year Five-year Six-year Public 4-Year Independent 4-Year For-Profit 4-Year Source: U.S. Department of Education, National Center for Education Statistics, Digest of Education Statistics 2012. Note: Percentages are for entering cohort of 2005. Four-Year, Five-Year, and Six-Year Graduation Rates by Institutional Type
  19. 19. 24% 47% 61% 44% 59% 68% 18% 0% 10% 20% 30% 40% 50% 60% 70% 80% Four-year Five-year Six-year Public 4-Year Independent 4-Year For-Profit 4-Year* Four-Year, Five-Year, and Six-Year Graduation Rates of Pell-Eligible Students by Institutional Type * Four-year and five-year graduation rates for for-profit 4-year institutions are not available. Source: U.S. Department of Education, National Center for Education Statistics, Beginning Postsecondary Students (BPS 04/09). Analysis by the Council of Independent Colleges. Note: A "Pell-eligible student" is defined as any student who had accumulated Pell grants greater than zero by 2009. Graduation rates are calculated based on students who stayed at their first institutions from 2004 through 2009. Council of Independent Colleges, April 2014
  20. 20. 38% 28% 12% 22% 59% 15% 5% 21% 18% 9% 8% 65% 0% 10% 20% 30% 40% 50% 60% 70% 48 months or less 49-60 months 61-72 months 73 months or more Public 4-Year Independent 4-Year For-Profit 4-Year Time to Degree by Institutional Type Source: U.S. Department of Education, National Center for Education Statistics, 2008–09 Baccalaureate and Beyond Longitudinal Study (B&B:08/09): First Look. Note: Percentages are for 2007–2008 first-time bachelor’s degree recipients; time to degree is calculated by number of months from enrollment in postsecondary education to degree attainment for first-time bachelor's degree recipients. Median Time to Degree Public 4-year: 55 months Independent 4-year: 45 months For-Profit 4-year: 103 months Council of Independent Colleges, April 2014
  21. 21. Council of Independent Colleges, April 2014 5.2% 5.2% 8.3% 9.6% 12.9% 13.6% 0% 2% 4% 6% 8% 10% 12% 14% 16% FY2010 FY2011 Independent Public For-Profit Source: U.S. Department of Education, “Default Rates Continue to Rise for Federal Student Loans,” September 30, 2013. Note: Percentages represent two-year cohort default rates (CDR). Federal Student Loan Default Rates by Sector
  22. 22. For additional information about these facts and others that describe the quality and affordability of independent colleges, please see: www.cic.edu/MakingtheCase For questions, please contact: Laura Wilcox, Vice President for Communications lwilcox@cic.nche.edu (202) 466-7230 Council of Independent Colleges, April 2014

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