Might the cliche of the forever-indebted college student someday become a fable?
According to a new College Board report, total college student debt for 2013-14 is down by $8.7 billion from the previous school year, with students having borrowed $106 billion. This is the third consecutive year American student borrowing has decreased.
There may be several factors behind the drop, says Megan McClean, NASFAA’s managing director of policy and federal relations. “What we’re seeing is recovery from economic downturn,” McClean says.
“Families and students are getting back on their feet and borrowing less. States and institutions are re-upping their investments a bit. Grant dollars are also a big contributor.”
Jennifer Ma, the report’s author and a policy research scientist at the College Board, identifies a shift in student demographics as another potential reason for the decline. “Enrollment is down in the for-profit and two-year sectors,” Ma says. “Increased press coverage is also helping students realize they can’t borrow irresponsibly.”
While media attention focuses heavily on the burden of undergraduate debt, graduate students owe more dollars, Ma says. Fifty-three percent of students holding two- or four-year degrees owe less than $20,000 in loans, while 44 percent of graduates with master’s degrees owe $40,000 or more.
The drop in debt could lead to increased enrollment, Ma and McClean say.
“When we paint the need to borrow for higher ed as a crisis, there is a damaging effect for students thinking about going to school,” says McClean. “The more we see these numbers level off and the more we share that, this will help remove the stigma around borrowing and pursuing higher education.”