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College Board Report Describes 'Who Borrows Most?'

Today, the College Board released a report,"Who Borrows Most? Bachelor's Degree Recipients with High Levels of Student Debt" that looks at students who left campus in 2007-08 with more than $30,500 in debt—a total of 17 percent of college graduates.

The report found that a growing minority of college graduates are borrowing too much and using the kinds of loans that are likely to cause them significant repayment difficulties.

Highlights of the report include:

-High debt levels are most common in students at for-profit colleges. Some 53 percent of graduates from for-profit colleges had more than $30,500 in debt. About 24 percent of those who graduate from private not-for-profit four-year institutions had high debt and 12 percent from public four-year institutions.

-Among all bachelor's degree recipients, about 10 percent graduated with $39,500 in education debt and 25 percent with at least $24,600. For those with associate's degrees, 10 percent graduated with more than $20,400 in debt. The report says the problem is not so much that all students are borrowing too much—more than half of those with associate's degrees and one-third of those with bachelor's degrees have no debt. But it's hard to anticipate future earnings, and too many students are borrowing more than they are likely to be able to manage.

-High undergraduate debt is more common among independent students—24 percent graduate with high debt—than dependent students (where parents are providing support).

-Debt levels are not closely linked with family income for dependent students, and middle-income students are somewhat more likely than lower-income students to accumulate high debt levels.

-High debt levels are more prevalent among black bachelor's degree recipients, and the differences are not entirely explained by differences in family income.

-The majority of high-debt graduates have both federal and nonfederal loans. Nonfederal borrowing is riskier than federal borrowing because it does not come with the same repayment protections and carries higher interest rates.

The report concludes that students need accurate information before incurring debt so they are not at risk of future financial insecurity.

The authors are Sandy Baum, professor emerita of economics at Skidmore College, and Patricia Steele, both of whom are independent policy analysts for the College Board and co-authors of the "Trends in College Pricing and Trends in Student Aid" reports.

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