A Leg Up: How a Privileged Minority Is Graduating Without Debt

This first appeared on demos.org
Mark Huelsman

The rapid and unrelenting rise in student debt over the past decade has put college affordability and student loan policy at the forefront of the national political conversation. By now, the numbers are familiar: 7 in 10 bachelor’s degree recipients must borrow if they hope to get a degree, and average debt at graduation has now exceeded $30,000.1 Due to expanded undergraduate and graduate enrollment, stagnant wages, and higher tuition spurred in large part by state disinvestment, the amount of student debt in the U.S. economy has increased by nearly a trillion dollars in the past decade alone.2

Unlike two decades ago, when fewer than half of students borrowed for a four-year degree, it’s difficult to find students today who can graduate without debt, even at public colleges and universities. Indeed, it’s increasingly difficult to find those who can receive an associate degree without taking on loans. Borrowing is essentially a requirement for black and low-income students. And high costs and the universality of borrowing has led to a system in which many students are taking on debt without graduating, which massively increases the risk of struggling to repay or defaulting on a loan. Both average borrowing and the risk associated with dropping out with debt are inequitably distributed by race and class.3 These worrying trends have led policymakers and advocates to focus on the need for the U.S. to return to a system of affordable—including tuition-free or debt-free—public college, in which students could finance a two- or four-year degree simply through part-time work or exceedingly modest family savings.

As policymakers begin to develop comprehensive proposals, it’s important to understand which students are currently able to graduate without debt. If nearly 70 percent of graduates are borrowing, 30 percent (including 35 percent of public college graduates) are not. Who are these students? What type of family or financial resources do they have at their disposal? What are their work habits? In short, what does it take to graduate debt-free these days? This brief will answer these questions, allowing for a deeper understanding of what levers, policies and practices will be necessary to ensure all students can attend a state college or university without taking on debt.

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