Trends in Student Loans

1
Trends in Student Loans

• Sandy Baum
• The College Board and Skidmore College
• NCHELP Leadership Conference
• January 2005

2
Estimated Student Aid by Source for Academic Year
2003-04 Current Dollars (in Billions)
3
Inflation-Adjusted Changes in Tuition, Family
Income, and Student Aid, 1983-84 to 1993-94 and
1993-94 to 2003-04
4
Ten-Year Trend-Line of Aid Used to Finance
Postsecondary Education Expense, 1993-94 - 2003-04
5
Growth of Stafford, PLUS, and Nonfederal Loan
Dollars in Constant (2003) Dollars, 1996-97 to
2003-04
6
TOTAL STUDENT BORROWING1995-96 2003-04,
Constant 2003 Dollars
17
14
11
444
10
10
8
6
6
4
7
Student Credit Cards

• Georgetown University Study, 2002
• Balances on active student credit cards lower
  than balances cards of other young adults.
• Students more likely than others to pay in full
  each month.
• Students have more fees than others for late
  payments, exceeding credit limit.
• Source Michael Staten and John Barron, College
  Student Credit Card Usage, Credit Research
  Center, Georgetown University, 2002.

8
Student Credit Cards

• Proportion not paying in full each month
  increases over four years of college
• Of those who have credit cards, only 6 got them
  on campus.
• 35 mail applications
• 29 at a bank
• 15 from parents
• Source Angela Lyons, Credit Practices and
  Financial Education Needs of Midwest College
  Students, University of Illinois-Urbana, December
  2003

9
Loan Volume by Type of InstitutionSource John
Lee, Student Marketmeasure
Source
10
Loan Volume in FY2003, by Type and
ControlSource John Lee, Student Marketmeasure
11
Grants vs. Loans, Growth and Percent Share of
Total Aid, 1993-94 to 2003-04
12
Debt Burden

• Median payment / income 7
• Not up as debt amounts increase
• No evidence of debts significantly affecting
  choices about study, careers
• (Nellie Mae, ACE)

13
Manageable Debt Levels

• Is 8 the right number?
• Banking standards
• Repayment studies
• Need analysis should EFC include appropriate
  debt?
• Relative standards of living, Consumer
  Expenditures