Help Navigating the College Debt Jungle

A new report laying out loan data per student at more than 1,000 U.S. colleges can be useful to parents and future students.

From the California Institute of Technology and the California Institute of the Arts to the Massachusetts Institute of Technology and Bridgewater State University (also in Massachusetts) – data on debt levels for the 2016 graduating class at public and non-profit institutions are contained in a newly released report by the Institute for College Access & Success (TICAS).

TICAS has put together a handy interactive map summarizing the data. An individual college’s data can be found by clicking the state where it’s located and scrolling through the colleges in that state.  Not all colleges are presented, because very few for-profit colleges report their students’ debt data.

Diane Cheng, associate research director of TICAS, walked through the most important things to look for when considering where to attend.  But the bottom line is, “When students see colleges where a large share of students borrow, and they take out a lot of debt, that can be a red flag,” she said.

It’s virtually impossible to generalize about how much a prospective student will have to borrow, because every student has a unique combination of academic accomplishment and socioeconomic status. Also factoring into borrowing is each college’s sticker price and unique tuition policy. Tuition at public colleges is also affected by state funding, which remains 16 percent lower than before the recession, Cheng said.

She recommends starting with the following four indicators in the map:

• Average dollars of debt after graduation: Click on a specific state or states on the map where the teenager is looking at colleges. Scroll through the colleges displayed for each state.
  What to look for in the data:  Compare the average dollar debt level per student for each of the colleges your teenager is considering.  If eight colleges are in the mix, compare average debt for all eight. Parents might even want to make a spreadsheet comparing average debt levels and the other data below for each institution of interest.

• Likelihood of graduating with debt: This is the second number listed under each college and, again, can be found by clicking on the appropriate state in the map and scrolling through the state’s reporting colleges.
  What to look for in the data: Compare the percentage of students who graduated with debt last year at all the schools under consideration.  The extent of indebtedness varies widely.  For example, only 16 percent of graduates of Fairfield University in Connecticut left school with debt. At the other extreme, 100 percent of students at several bible colleges borrowed money, including Charlotte Christian College in North Carolina and Christian Life College in Illinois. At these and many other small colleges, 100 percent of the graduates borrowed, places like Mt. Sierra College in California and Northwest College of Art and Design in Washington.

• Amount of private debt per student: It is crucial that students exhaust all of the federal student loans available to them each year before resorting to loans from private lenders, which usually carry higher interest rates and lack the affordable repayment options in federal loans.
  What to look for in the data:  Many of the colleges with the highest private loan debt, per student, are small or private colleges. At the top of the list is Grove City College in Pennsylvania – students leave there with an average of $20,334 in private debt, followed closely by places like Dean College in Massachusetts and the Culinary Institute of America in New York. Click here for a PDF of the top 100 colleges with the highest per capita private loan debt.   (If the college your child is considering doesn’t appear in the PDF, the data might be available from the college.) For colleges that don’t appear in the top 100, an alternative is to look at non-federal debt as a share of total debt, by institution, that is presented in the map. Non-federal debt includes loans from private lenders and also from the colleges themselves and loans from state governments, which are of varying quality. For example, New Jersey’s student loan program came under criticism for extremely aggressive collection practices, though some reforms were made.

• Share of college’s total grant funding going toward student financial need: Some colleges focus their own grant dollars on meeting students’ need, but others award grant dollars in excess of need, Cheng said. In an effort to raise their rankings, they might funnel more aid to high-achieving students – rich or poor – or they funnel discounts to applicants with high-income parents, knowing that these families will, despite the discounts, pay higher tuitions and bring more money into the college.
  What to look for in the data:  This category is listed for each college in the map as “institutional grants that are need-based.”  Nearly all of Morehouse College of Georgia’s grants to students (98 percent) are based on need, and about half of its students receive federal Pell Grants for low-income students. But only 27 percent of North Georgia University’s grants are need-based, and 36 percent receive Pell Grants.

Most colleges are required to provide net cost calculators to prospective students. TICAS has information about these calculators on its website.  Another excellent option for comparing colleges is a calculator that allows parents to input their personal financial information into specific colleges to see how their child might fare.   Unfortunately, only a few elite institutions provide the data required for the calculator.

It’s a jungle out there parents – learn as much as you can.

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