An unremarkable yet useful update on the student loan fiasco

We have new data about American student loan debt, thanks to a new report from The Institute for College Access & Success (TICAS).

There is nothing shockingly different in the publication.  There aren’t any sudden changes.  It’s just another datapoint on the sprawling debacle of how we have come to finance American higher education.

About two thirds of students (65%) who received undergraduate degrees in 2017 hold debt, while about one third do not.   The average amount of debt held is $28,650, with “average debt ranging from $4,400 to $58,000 among the 925 colleges that had both usable data and at least 100 graduates in the Class of 2017.”

The geography of debt remains the same, as “high-debt states are located mainly in the Northeast, with low-debt states primarily in the West.”

student debt by states_2017_TICAS

Click through for the TICAS interactive map.

State averages for debt at graduation ranged from a low of $18,850 (Utah) to a high of $38,500 (Connecticut), and new graduates’ likelihood of having debt varied from 38 percent (Utah) to 74 percent (New Hampshire). In 18 states, average debt was more than $30,000.

The data won’t surprise anyone who’s been paying attention.  There aren’t any major changes.  That average debt load for those graduating in 2017?  It’s “only 1 percent higher than the 2016 average of $28,350.”  The geography of debt?  “Many of the same states appear at the high and low ends of the spectrum as in previous years.”  Defaults continue:

there are a record high 8.9 million federal loan borrowers currently in default, and more than 1 million borrowers defaulting every year. Nearly a quarter (23 percent) of federal Direct Loan borrowers are over 30 days delinquent or in default.

Can student debt grow in the future?  The report is clear that one limit isn’t really being felt yet: “recent federal data show that more than half of undergraduates [53%] who take out private loans have not used the maximum available in federal student loans.”  On the other hand, the rate of debt growth has slowed down over the past four years:

Student debt 1996-2016_TICAS

So perhaps we’re reaching a plateau, especially as some states gradually remember what the “public” in “public higher education” meant, and as families take other cost-saving measures (students living at home, choosing less expansive campuses).  Perhaps we won’t crack the $2 trillion total debt ceiling.

What’s not in the report?  Graduate school debt is missing, and that can be enormous.  The report also addresses public and nonprofit institutions, meaning it leaves off for-profits (Why? “because so few of these colleges report the relevant debt data.”).  But for some data that comes close, the for-profit graduate picture is much more dire:

the vast majority of graduates from for-profit four-year colleges (83 percent) took out student loans. These students graduated with an average of $39,900 in debt — 41 percent more than 2016 graduates from other types of four-year colleges.

Debt values are self-reported, which can lead to distortions in either direction.  Also missing are students who take classes but leave without graduation.

Taken together, this is a useful update on America’s experiment in financializing higher education.  It shows how widespread student debt is, how expensive and where people are most likely to hold it.  It’s a snapshot of the project in mid-stream.

So what’s next?  How far will the course take us?

(thanks to Inside Higher Ed for the pointer)

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