April 26, 2011

Real Student Loan Borrowing Rates Flat for A Decade

I get the impression that people think there is some sort of crisis in student loan indebtedness lately.  Stories of students with religious studies degrees and $150,000 in student loan debt are not unusual.   But the reality of student loan borrowing is far different.  Very few people have very large loans.   

But are more people taking out more and more loans?    Yes and no.   Yes the total loans are bigger now than in the past.   But you have to consider inflation.   If you look at student loan borrowing in public four year universities and adjust the amounts to inflation then the amounts borrowed has not changed much at all over the past 10 years.

The CollegeBoard has data for trends in student financial aid.   There is an Excel sheet on their site with a bunch of tables with lots of data on financial aid.   Figure 10a in their sheet shows the Average Debt levels of Bachelor's Degree Recipients, Public Four-year Colleges and Universities in Constant 2009 Dollars, 1999-2000 to 2008-09.

Here's the data :

  Per Borrower Per Bachelor's Degree Recipient Percentage who borrowed
Public Four-Year      
1999-00 $19,500 $10,500 54%
2000-01 $19,100 $10,000 52%
2001-02 $19,300 $10,000 52%
2002-03 $19,600 $10,300 53%
2003-04 $19,700 $10,700 54%
2004-05 $20,200 $11,100 55%
2005-06 $20,500 $11,300 55%
2006-07 $20,200 $11,400 55%
2007-08 $20,300 $11,200 55%
2008-09 $19,800 $11,000 55%

Graphically that looks like this:

Looks pretty flat when you take inflation into account.

Now keep in mind that these numbers are adjusted for inflation, so they are citing the figures from earlier years after adjusting them to the value of a dollar in 2008-2009.

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