Who Owes this Money?
Master’s Students Shoulder the Majority of Debt
Choosing to earn a Master’s degree certainly comes at a cost. Unlike doctorate students, most Master’s degree students do not have opportunities for assistantships or grants. Instead, they cover 53% of tuition costs with loans , taking out an average of $13,151 for each year of graduate school. This debt makes up 38% of the nation’s student debt load even though Master’s degree students only make up 17% of all federal student loan borrowers.
Debt Burden of Students at Private Colleges
Students attending a private college pay nearly three times as much as those attending an in-state public university. It follows then that bachelor’s, master’s, and doctorate program graduates from private universities owe much more than their public college counterparts. In 2012, bachelor’s degree graduates from private universities owed an average of $32,300 while public school graduates only owed $25,550.
Newer data confirms that students at private colleges continue to borrow more federal money each year than their public school counterparts. This is especially true for students enrolled at four-year private for-profit colleges. The National Center for Education Statistics reports that the average amount of federal student loans borrowed in 2015-2016 was $6,700 at public four-year colleges, $7,200 at private non-profit four-year colleges, and $8,200 at private for-profit four-year colleges.
The trend continues when you consider private student loans as well. For the 2015 to 2016 school year, the average amount of private loans borrowed was $7,800 at public four-year colleges, $8,100 fat for-profit colleges, and $12,400 at private non-profit four-year colleges. Unlike federal loans, these private loans do not come with many of the protections offered by the federal government.
Senior Citizens Still Owe Money
Data from the New York Federal Reserve tells us that borrowers ages 39 and under have the highest total student loan balance. This makes sense since you (theoretically) pay off more debt as time goes on. However, student debt is not just a young adult issue. As of 2017, nearly 3.2 million people age 60+ are still paying off debt—three times more than were a decade ago. For this age group, the total loan balance is 85.4 billion dollars. Although it is the least amount owed by any age group, it is evidence of the lengthy burden student loans present.
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Parents Contribute, but Students Owe More
Parents often cosign private loans for the 6% of students who take them out. They’re ultimately still responsible for the debt, but the student typically takes responsibility for paying it back. Parents also borrow an average of $17,500 in Parent PLUS loans to help cover their child’s expenses. Even with all of the parental borrowing, students still borrow more on average, but the numbers are getting closer. Sallie Mae found that in 2018, around 14% of college costs were covered by student borrowing while parent loans covered 10%. Compare that to their 2017 research that found student loans covered 19% of college costs while parent loans covered just 8%. This shows a trend towards parents assuming more and more financial responsibility for their child’s education.
