REpw STUDENT DEBT ANDTHE CLASS OF 2016 \1 0 ?2 EMBER 7? the institute for coHeqe access success acknowledgements The Institute for College Access & Success (TICAS) is an independent, nonprofit, nonpartisan organization working to make higher education more available and affordable for people of all backgrounds. Our Project on Student Debt increases public understanding of rising student debt and the implications for our families, economy, and society. To learn more about TICAS, see ticas.org and follow us on Twitter at @TICAS_org. Student Debt and the Class of 2016, our twelfth annual report on debt at graduation, was researched and written by TICAS’ Diane Cheng, Debbie Cochrane, and Veronica Gonzalez. Special thanks to the entire TICAS staff, virtually all of whom contributed to the report’s development and/or release. All of the college- and state-level debt data used for the report are available online at ticas.org/posd/map-state-data. We are grateful to our foundation partners and individual donors whose support makes TICAS’ work possible. Current foundation funding for our Project on Student Debt and other national research and policy work comes from the Ford Foundation, Bill & Melinda Gates Foundation, Rosalinde and Arthur Gilbert Foundation, Kresge Foundation, and Lumina Foundation. The views expressed in this paper are solely those of TICAS and do not necessarily reflect the views of our funders. This report can be reproduced, with attribution, within the terms of this Creative Commons license: creativecommons.org/licenses/by-nc-nd/3.0/. page STUDENT DEBT AND THE CLASS OF 2016 Table of Contents: Student debt and the class of 2016 Overview and Key Findings 1 About This Report and the Data We Used 1 A Note About Student Debt Averages Nationwide 2 Student debt at colleges 3 A Note on Student Debt at For-Profit Colleges 4 Student Debt By state 5 Table 1: High-Debt States 5 Table 2: Low-Debt States 5 Student Debt and College (Un)Affordability 6 Table 3: Percentage of Graduates with Debt and Average Debt of Those with Loans, by State 7 Private (NONFEDERAL) LOANS 9 Loans from Private Banks and Lenders 9 State Loans 10 Data on Debt at Graduation 11 Table 4: Comparison of Available Annual Data on Debt at Graduation What Colleges and States Can Do 11 12 Institutional Policy Ideas for Reducing Debt Burdens 12 State Policy Ideas for Reducing Debt Burdens 13 federal Policy Recommendations to Reduce the Burden of Student Debt 14 methodology: where the numbers come from and how we use them 19 THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page overview and Key Findings Student Debt and the Class of 2016 is TICAS’ twelfth annual report on the student loan debt of recent graduates from four-year colleges, documenting the rise in student loan debt and variation among states as well as colleges. Unless otherwise noted, the figures in this report are only for public and nonprofit colleges, because virtually no for-profit colleges report what their graduates owe. State averages for debt at graduation ranged from a low of $20,000 (Utah) to a high of $36,350 (New Hampshire), and new graduates’ likelihood of having debt varied from 43 percent (Utah) to 77 percent (West Virginia). In 17 states, average debt was more than $30,000. Many of the same states appear at the high and low ends of the spectrum as in previous years. High-debt states remain concentrated in the Northeast and Midwest, and low-debt states are mainly in the West. See page 7 for a complete state-by-state table. At the college level, average debt at graduation covers an enormous range, from $4,600 to $59,100. New college-level data on nonfederal loan borrowing show that private loan and state loan borrowing is concentrated in particular college types and states. The burden of student debt is not just about how much debt students have, but also about what types of loans they took out. New college-level data on nonfederal loan borrowing show that private loan and state loan borrowing is concentrated in particular college types and states. Of the 100 colleges with the highest private loan borrowing, 85 are nonprofit colleges and 34 are located in Pennsylvania. In terms of state loans, almost 80 percent of the 2016 graduates with state loan debt went to college in just four states – Texas, Minnesota, Massachusetts, and New Jersey – which collectively produce only 14 percent of college graduates. About this Report and the Data We Used Colleges are not required to report debt levels for their graduates, and the available collegelevel federal data do not provide the typical debt for bachelor’s degrees or include private loans. To estimate state averages, we used the most recent available figures, which were provided voluntarily by more than half of all public and nonprofit bachelor’s degree-granting four-year colleges. 1 The limitations of relying on voluntarily reported data underscore the need for federal collection of cumulative student debt data for all schools. For more about currently available debt data, see page 11. This report includes federal policy recommendations to address rising student debt and reduce debt burdens, including the collection of more comprehensive college-level data. Other recommendations focus on reducing the need to borrow, keeping loan payments manageable, improving consumer information, strengthening college accountability, and protecting private loan borrowers. For more about these federal policy recommendations, see page 14. To learn more about what states and colleges can do, see page 12. A companion interactive map with details for all 50 states, the District of Columbia, and more than 1,000 public and nonprofit four-year colleges is available at ticas.org/posd/map-state-data. page 1 STUDENT DEBT AND THE CLASS OF 2016 A Note About Student Debt Averages Nationwide This year’s report does not include national figures for the share of the Class of 2016 with debt or their average debt. While we receive new school-byschool debt figures annually, and use them to calculate state-level averages, the best available national average comes from a nationally representative federal study that is released every four years by the U.S. Department of Education (the National Postsecondary Student Aid Study, or NPSAS). The next set of NPSAS data will cover students who graduated in the Class of 2016 – the same group of students covered in this report – but the federal data are not expected to be available for several more months. Why are we waiting for NPSAS to publish a national average rather than estimating it based on data that schools voluntarily report to college guide publishers? Because we have consistently found that college-reported figures understate student debt levels. NPSAS provides the most comprehensive and reliable national estimate because it is based on a large, nationally representative sample of students, rather than on voluntarily reported data by colleges that participate in a private survey. In years when we can make a direct comparison to NPSAS data, the college-reported figures understate average student debt at the national level by as much as eight percent compared to NPSAS, and the share of students borrowing by as much as 13 percent. Additionally, the NPSAS data will allow us to include borrowing and debt levels for for-profit college graduates, which is not possible with available college-level data because almost no for-profit colleges voluntarily report their data to other surveys. THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 2 student debt at colleges Of the 2,025 public and nonprofit four-year colleges in the U.S. that granted bachelor’s degrees during the 2015-16 year, 1,055 – just 52 percent – reported figures for average debt, percent of graduates with debt, and number of borrowers for the Class of 2016. There is great variation in debt across reporting colleges, with average debt figures from $4,600 to $59,100 among the 936 colleges that had both usable data and at least 100 graduates in the Class of 2016.2 Because not all colleges report debt data, the actual ranges could be even wider. At the high end, 194 colleges reported average debt of more than $35,000. The share of students with loans also varies widely. The percent of graduates with debt ranges from six percent to 98 percent. Twenty-six colleges reported that at least 90 percent of their 2016 graduates had debt. Many high-debt colleges could do more to direct their financial aid resources toward students with financial need. Student debt varies considerably among colleges due to a number of factors, such as differences in tuition and fees, the availability of need-based aid from colleges and states, colleges’ financial aid policies and practices, living expenses in the local area, the demographic makeup of the graduating class, the degree to which parents use Parent PLUS loans, and, at public colleges, the extent of out-of-state enrollment. Students and families often look at the published tuition and fees for a college as an indicator of affordability. However, students attending college need to cover the full cost of attendance, which also includes the cost of books and supplies, living expenses (room and board), transportation, and miscellaneous personal expenses. Colleges’ cost-of-attendance estimates are often referred to as the sticker price. Many students receive grants and scholarships that offset some of these costs, and colleges that appear financially out of reach based on sticker price may actually be affordable because they offer significant grant aid. What students have to pay is called the net price, which is the full cost of attendance minus expected grants and scholarships. Students’ net price can be much lower than the sticker price, yet many students and parents are unaware of this distinction when comparing their options. At some of the most expensive schools in the country, the net price for low- and moderate-income students can be lower than at many public colleges, because of financial aid packaging policies and considerable resources for need-based aid from endowments and fundraising. This in turn can contribute to relatively low average debt at graduation. Some schools enroll relatively few students with low and moderate incomes, which may also contribute to low student debt levels if their higher income students can afford to attend without borrowing much or at all. Many colleges at which graduates leave with high levels of debt could do more to direct their financial aid resources toward students with financial need. Among the 60 colleges reporting average debt of at least $40,000 and that reported details on institutional grant aid spending, 26 colleges (43%) reported spending at least 20 percent of their institutional grant dollars on students who do not have financial need, either because they could afford their total college costs (as determined through a federal calculation) or because their need had already been met. Together, these 60 high-debt colleges spent a total of $465 million on institutional grant aid for students without financial need, yet only four of these colleges fully met the need of at least a quarter of their full-time students. page 3 STUDENT DEBT AND THE CLASS OF 2016 A Note on Student debt at for-profit colleges For-profit colleges are not included in the state averages, because so few of these colleges report the relevant debt data. Only 10 of 465 for-profit, four-year, bachelor’s degree-granting colleges (2% of colleges in this sector, 3% of bachelor’s degrees awarded) chose to report the number of graduating students in the Class of 2016 with loans, the percent of graduates with debt, and those graduates’ average debt. For-profit colleges do not generally respond at all to the survey used to collect the data in this report or to other similar surveys. (For more about this survey, see page 19.) About six percent of bachelor’s degree recipients in 2015-16 were from for-profit colleges.* However, for-profit colleges are where debt levels are most troubling. The most recent nationally representative data on for-profit college students are for 2012 graduates, and they show that the vast majority of graduates from for-profit four-year colleges (88%) took out student loans. These students graduated with an average of $39,950 in debt — 43 percent more than 2012 graduates from other types of four-year colleges.** * Calculations by TICAS on 2015-16 completions from U.S. Department of Education, Integrated Postsecondary Education Data System (IPEDS), using the latest data available as of August 3, 2017. These figures refer to all for-profit four-year colleges that reported granting bachelor’s degrees in 2015-16. ** Calculations by TICAS on data from U.S. Department of Education, National Postsecondary Student Aid Study 2012. THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 4 student debt by state Statewide average debt levels for the Class of 2016 range from $20,000 to $36,350. Many of the same states appear at the high and low ends of the spectrum as in previous years.3 The share of graduates with debt ranges from 43 percent to 77 percent. We base state averages on the best available college-level data, which were reported voluntarily to college guide publisher Peterson’s by 1,055 public and nonprofit four-year colleges for the Class of 2016. The data reported by colleges are not audited or confirmed by any outside entity. For more about the data and our methodology, please see the Methodology section on page 19. The following tables show the states with the highest and lowest average debt levels for the Class of 2016. Similar to past years, high-debt states are located mainly in the Northeast and Midwest, with low-debt states primarily in the West.4 table 1 table 2 HIGH-DEBT STATES Low-DEBT STATES New Hampshire $36,367 Utah Pennsylvania $35,759 New Mexico $21,373 Connecticut $35,494 California $22,744 Delaware $33,838 Arizona $23,447 Minnesota $31,915 Nevada $24,128 Massachusetts $31,563 Florida $24,461 South Dakota $31,362 Washington $24,609 Maine $31,295 Wyoming $25,378 Alabama $31,275 North Carolina $25,562 Rhode Island $31,217 Oklahoma $25,856 $19,975 The table on page 7 shows each state’s average debt and proportion of students with loans in the Class of 2016, along with information about the amount of usable data actually available for each state.5 page 5 STUDENT DEBT AND THE CLASS OF 2016 Student Debt and College (Un)Affordability Students generally borrow when available resources from income, savings, and grants and scholarships are not enough to cover college costs. With less family income to contribute and insufficient grant aid, lower income students face the most extreme and unrealistic financial expectations when it comes to paying for college. Nationally, families that earn $30,000 or less would need to spend 77 percent of their total income to cover the net price at public four-year colleges, more than double the burden placed on any other income group.* Unsurprisingly, many of the states where lower income students face the largest challenges paying for college are also states where graduates leave college with high debt. In five of the ten states where public college graduates’ debt loads are highest, an earlier TICAS analysis, College Costs in Context, had shown that the net price for low-income students attending public four-year colleges exceeded total family income. In all but one of the ten highest debt states for public college graduates, low-income students would have to work 30 or more hours per week to cover their net price.** To put these figures in context, the affordability benchmark developed by Lumina Foundation, a framework for determining what students and families can afford to pay for college, suggests that low-income students should be able to cover the net price of college by working 10 hours per week.*** The disparity between that expectation and the reality for low-income students underscores the link between college affordability and student debt, and points to where improvements are most needed. * TICAS. 2017. College Costs in Context: A State-by-State Look at College (Un)affordability. https://ticas.org/sites/default/files/pub_files/ college_costs_in_context.pdf. ** The ten states where public college graduates’ debt loads are highest are: Alabama, Delaware, Maine, Massachusetts, Michigan, Montana, New Hampshire, Pennsylvania, Rhode Island, and South Carolina. Low-income students’ net prices exceed family income in these five states: Alabama, Delaware, New Hampshire, Pennsylvania, and South Carolina. The one state in which low-income students could work fewer than 30 hours to cover the average net price of public four-year colleges is Rhode Island. *** Lumina Foundation. 2015. A Benchmark for Making College Affordable: The Rule of 10. http://www.luminafoundation.org/files/resources/ affordability-benchmark-1.pdf. THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 6 table 3 Percentage of Graduates with debt and average debt of those with loans, by state Institutions (BA-granting) Class of 2016 State Alabama Average Debt Rank % with Debt Rank Total Graduates % at Schools with Usable Data Usable $31,275 9 50% 43 32 13 59% $26,008 40 49% 47 5 4 100% Arizona $23,447 47 49% 47 17 6 71% Arkansas $26,859 35 56% 31 23 10 55% California $22,744 48 53% 37 134 70 79% Colorado $26,520 37 53% 37 26 14 85% Connecticut $35,494 3 60% 18 22 14 65% Delaware $33,838 4 63% 10 5 2 68% District of Columbia $31,054 12 53% 37 8 6 78% Florida $24,461 45 52% 41 102 30 78% Georgia $27,657 28 60% 18 59 31 72% Hawaii $26,092 39 50% 43 9 3 72% Alaska Idaho $27,130 33 66% 7 11 6 63% Illinois $29,271 23 61% 14 77 38 79% Indiana $29,562 20 59% 26 50 34 86% Iowa $29,801 19 65% 8 34 23 89% Kansas $28,776 25 60% 18 30 14 90% Kentucky $28,910 24 63% 10 30 18 90% Louisiana $27,138 32 50% 43 28 10 59% Maine $31,295 8 55% 34 19 9 50% Maryland $27,455 30 54% 36 32 15 63% Massachusetts $31,563 6 60% 18 81 45 76% Michigan $30,852 13 63% 10 49 27 72% Minnesota $31,915 5 68% 4 38 24 84% Mississippi $29,384 21 60% 18 16 9 84% Missouri $27,532 29 57% 30 55 26 80% Montana $31,065 11 60% 18 11 8 97% Nebraska $26,585 36 61% 14 24 9 63% Nevada $24,128 46 52% 41 9 2 89% New Hampshire $36,367 1 74% 3 15 10 91% New Jersey $29,878 18 61% 14 38 18 71% New Mexico $21,373 49 55% 34 11 4 42% New York $30,346 15 58% 27 184 83 68% North Carolina $25,562 42 58% 27 63 37 86% * * * * 14 5 21% Ohio $30,351 14 64% 9 92 42 87% Oklahoma $25,856 41 50% 43 29 15 84% $27,321 31 58% 27 29 18 91% North Dakota Oregon page 7 STUDENT DEBT AND THE CLASS OF 2016 Percentage of Graduates with debt and average debt of those with loans, by state Institutions (BA-granting) Class of 2016 State Average Debt Rank % with Debt Rank Total Graduates % at Schools with Usable Data Usable Pennsylvania $35,759 2 68% 4 129 89 83% Rhode Island $31,217 10 61% 14 11 6 68% South Carolina $30,123 16 60% 18 33 16 66% South Dakota $31,362 7 75% 2 13 7 32% Tennessee $26,981 34 60% 18 48 26 85% Texas $26,292 38 56% 31 95 53 91% Utah $19,975 50 43% 50 17 8 68% Vermont $28,662 26 63% 10 18 7 72% Virginia $29,296 22 56% 31 47 36 96% Washington $24,609 44 53% 37 42 17 94% West Virginia $27,708 27 77% 1 21 11 42% Wisconsin $30,059 17 67% 6 38 26 88% Wyoming $25,378 43 45% 49 2 1 100% * We did not calculate state averages when the usable data covered less than 30% of bachelor’s degree recipients in a given state for the Class of 2016. For more details, see the Methodology section on page 19. THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 8 private (NONFEDERAL) LOANS The burden of student debt is not just affected by the amount of debt students have, but also about what types of loans they took out. Carrying nonfederal loans can significantly affect borrowers’ ability to repay what they owe because such loans typically have higher costs than federal loans and provide little, if any, relief for struggling borrowers.6 Debt figures reported by colleges suggest that about one-fifth of graduates’ debt in recent years has been comprised of nonfederal education loans.7 Carrying nonfederal loans can significantly affect borrowers’ ability to repay what they owe. Nonfederal loans typically have higher costs than federal loans and provide little, if any, relief for struggling borrowers. The terms “private” and “nonfederal” are often used interchangeably to describe student loans outside of federal student loans. The majority of nonfederal loans are made by private banks and lenders, though some states and colleges have their own private, nonfederal loan programs for students. Specific costs and terms of nonfederal loans vary, though none provide the same consumer protections and repayment options that come with federal loans. Experts agree that students should exhaust federal loan eligibility before turning to nonfederal loans. Colleges that recommend specific nonfederal lenders must provide a “preferred lender list” that helps students who must look beyond federal loans compare options. These lists must include more than one lender, disclose the borrower benefits that contributed to the lenders’ inclusion on the list, and make clear that students are not required to use one of the recommended lenders. Because of changes to how the debt data used in this report are collected from individual colleges, it is possible to begin exploring the extent to which graduates from each college hold nonfederal loans. Graduates from high-debt colleges tend to rely more on nonfederal loans. However, some colleges where typical debt loads are low still have high rates of nonfederal loan usage. At the 80 colleges where borrowers’ average debt was under $20,000, there were at least 20 schools where one-fifth or more of students’ debt was nonfederal loan debt. Nationally representative data for 2012 graduates remain the best source of information about the extent of nonfederal debt among college graduates at the national level. Thirty percent of bachelor’s degree recipients that year graduated with nonfederal loans, with average nonfederal loan debt of $13,600.8 Nonfederal loans are most prevalent at for-profit colleges: 41 percent of their seniors graduated with private loans in 2012.9 Loans from Private Banks and Lenders Private education loans from banks and lenders are no more a form of financial aid than a credit card. Regardless of whether they are fixed or variable, interest rates for these loans are typically highest for those who can least afford them. In September 2017, interest rates for undergraduate private education loans were as high as 14.24%, compared to a federal student loan interest rate of 4.45%.10 While there is broad consensus that students should exhaust federal loan eligibility before turning to other types of loans, 47 percent of undergraduates who took out private loans in 2011-12 did not use the maximum available in federal student loans.11 College financial aid offices can play an important role in reducing their students’ reliance on private loans, but college practices vary widely.12 Some colleges take care to inform students about their federal loan eligibility before certifying private loans, whereas others encourage private loan financing by including private loans in students’ award packages. Today, private lenders typically look to schools to help certify students’ eligibility for loans, but they are not required to do so and certification rates have historically been much lower when market conditions were more favorable.13 An analysis by the Consumer Financial Protection Bureau (CFPB) and U.S. Department of Education found that at the height of the private loan page 9 STUDENT DEBT AND THE CLASS OF 2016 market in 2007, almost a third (31%) of private loans were made without college involvement.14 When colleges are unaware that their students are seeking or receiving private loans, they are unable to counsel students appropriately or report private loan usage accurately. (See our recommendation about private loan certification on page 17.) Private loan borrowing is concentrated in particular college types and states. For example, of the 100 colleges where graduates borrow most in private loans, 85% are nonprofit four-year colleges, which graduate 31% of bachelor’s degree recipients.15 Of the same 100 colleges, 34 are located in Pennsylvania, a state that accounts for just 5% of college graduates. State Loans Several states offer their own education loans, which have terms that vary widely. Although some may expect state loans to have better terms than those from private banks and lenders, their terms frequently have more in common with other private loans than with federal loans. The data reported by colleges indicate that state loan borrowing is concentrated in particular states. Almost eighty (79%) percent of the 2016 graduates with state loan debt went to college in just four states – Texas, Minnesota, Massachusetts, and New Jersey – which collectively produce just 14 percent of college graduates.16 While states often strive to create loan programs that are better for students than federal student loans, the reality generally falls far short.17 The extent to which these state loan programs urge borrowers to tap federal student loans first varies. Of the 100 colleges where graduates borrow most in private loans, 85 are nonprofit fouryear colleges, and 34 of the 100 are located in Pennsylvania. THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 10 Data on Debt at Graduation This report uses the only type of data currently available to gauge cumulative student debt for bachelor’s degree recipients each year. As we note elsewhere in this report, these data have significant limitations. There are several reasons why the voluntarily reported, collegelevel debt data provide an incomplete picture of the debt carried by graduating seniors. While schools awarding 78 percent of public and nonprofit college bachelor’s degrees in academic year 2015-16 reported debt figures, hundreds declined to report enough data to be included in this analysis. And as noted earlier, almost no for-profit colleges provide debt figures voluntarily. For more information on data limitations, see the Methodology section on page 19. For more information on for-profit colleges, see page 4. While the voluntarily reported data used in this report remain the best available for showing the variations in student debt across states and colleges, they also illustrate why more comprehensive and comparable data remain sorely needed. Beginning in 2015, in conjunction with the College Scorecard consumer tool, the U.S. Department of Education began publishing the median federal student loan debt of graduates by school. These figures, calculated by the Department using data available through the National Student Loan Data System (NSLDS), are a significant step in the right direction. Cumulative debt figures for all institutions receiving federal financial aid are included. This provides some data for schools that choose not to report them voluntarily, and the data come from administrative records rather than being self-reported by colleges. However, these federal data also have several limitations. They exclude private loans, because private loans are not included in NSLDS. They combine debt at graduation for all types of undergraduate credentials, from certificates to bachelor’s degrees, making comparisons between colleges with different mixes of credential types misleading. According to the Department, some schools are not yet accurately distinguishing between students who withdraw and those who graduate, when reporting to NSLDS.18 And in some cases, the debt figures represent a group of campuses rather than disaggregated data for each campus, which can be misleading for students looking for information about their particular campus. While the voluntarily reported data used in this report remain the best available for showing the variations in student debt across states and colleges, they also illustrate why more comprehensive and comparable data remain sorely needed. Students and families need better information about costs and student outcomes when making college choices. The Department’s data release and updated Scorecard are notable and important steps forward, but further improvements in the collection and availability of student debt data remain both necessary and long overdue. (See our recommendations for better data on page 16). table 4 Comparison of Available annual Data on debt at graduation This Report’s Data Federal College Scorecard Data All student loan debt Federal student loan debt only Bachelor’s degree recipients All undergraduate completers Voluntarily self-reported Calculated by the U.S. Department of Education What Data Are Reported Average debt for borrowers; Percent with debt; Number with debt Median debt for borrowers; Number with debt Coverage of Reporting Colleges Most public and nonprofit four-year colleges; few others All colleges offering federal aid Reported as individual campuses Campuses may be grouped together Type of Debt Included Type of Graduates How the Data Are Reported Multi-campus colleges page 11 STUDENT DEBT AND THE CLASS OF 2016 What Colleges and States Can Do The best ways for colleges and states to reduce students’ reliance on debt are to lower total college costs and provide need-based grants to help students cover costs without loans. Additionally, detailed below is an array of other options that colleges and state policymakers can consider to address college affordability and student debt. Each of these options is preferable to creating new loan programs or allowing or encouraging borrowers to refinance federal loans into state loans, policy ideas which very rarely help reduce the burden of student loan debt for those who most need the help and can unintentionally steer students away from the valuable benefits and consumer protections that come with federal student loans. Institutional Policy Ideas for Reducing Debt Burdens • Prioritize needy students when awarding grant aid. High-debt colleges spend hundreds of millions of dollars in institutional grants each year on students who have no financial need. Redirecting some of these resources to students who most need financial support would help reduce students’ debt burdens. • Provide counseling for students seeking private loans. Most private education loans are certified by the students’ schools, and the certification requests give colleges a timely opportunity to counsel students about the risks of private loans and alternative options to explore, including untapped grant aid or federal loans. • Look at borrowing trends across types of students and types of debt. The debt figures reported by colleges and used in this report are for all graduates, but debt burdens are not borne evenly across students. For example, the University of California consistently reports that lower income students are far more likely than those with higher incomes to graduate with debt.19 Uncovering these trends is the first step to addressing them. • Set some financial aid resources aside to help students with emergencies. Many students who face unexpected financial challenges throughout the academic year may need to take on unexpected debt, or, worse, stop out of college. Colleges that have grant aid specifically to help students cover such emergencies – and take care to ensure that students know about it – can help students bridge the financial gap. • Set clear, reasonable student budgets. Colleges develop estimates of what it costs students to attend, and these estimates are used to determine how much aid students are eligible for. Research suggests that colleges frequently lowball student costs, which can lead to unexpected financial struggles and additional debt if students’ expectations about costs and their plans for covering costs are out of line with reality.20 Setting cost estimates transparently would better position students for success, and help them avoid unexpected debt. • Ensure that net price calculators are easy to find, use, and compare. Since 2011, most colleges have been required to have net price calculators on their websites, to help prospective students get an early estimate of what any particular college will cost to attend. For some colleges, though, the utility of the calculators is undermined because of how difficult they are to find and use.21 Schools should promote the use of these tools, rather than deter it. THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 12 State Policy Ideas for Reducing Debt Burdens • Allocate available state grant aid based on need, not merit. In 2014-15, 24 percent of state grant aid dollars were allocated to undergraduate students without regard to their financial circumstances.22 Students with greater financial need are more likely to need loans to cover college costs, and need-based state grant aid can help reduce students’ need to borrow. • Exempt forgiven amounts of federal student loans from state income tax. When federal student loan debt is forgiven after 20 or 25 years of payments in an incomedriven repayment plan, the amount forgiven is currently treated as income by the IRS, and can turn a would-be source of financial relief into a significant financial liability for individuals who can least afford it. As stakeholders work to address this at the federal level, state lawmakers can do their part by excluding forgiven federal student loan debt from calculations of state tax liability, as Pennsylvania does.23 • Set institutional accountability standards for schools that receive state grant aid. In California, colleges where a substantial share of students borrow loans must meet student loan default rate and graduation rate standards in order to be eligible for state grant aid.24 These standards direct students and state subsidies to schools where students’ debt loads are more likely to be manageable. • Promote awareness of income-driven repayment plans. Most student loan debt is federal loan debt and can be repaid based on the borrower’s income, rather than the amount of debt they owe, which can help struggling borrowers stay on track and avoid default. Income-driven repayment plans also provide a light at the end of the tunnel by forgiving remaining debt, if there is any, after 20 or 25 years of payments. State policymakers can help get the word out about these income-driven plans through local outreach efforts and other channels of communication. • Require colleges within a state to adopt institutional strategies to help reduce the burden of student debt. For instance, states could require that colleges provide private loan counseling or analyze and report on trends in student borrowing. page 13 STUDENT DEBT AND THE CLASS OF 2016 Federal Policy Recommendations to Reduce the Burden of Student Debt In today’s economy, being able to complete a college degree or other credential paves the way toward improved career prospects and increased quality of life. For students who need to borrow to enroll in and complete their higher education, federal student loans are a critical resource, providing the safest and most affordable borrowing option. However, for too many borrowers, student loan repayment is a challenge: One in four federal student loan borrowers are delinquent or in default on their loans.25 Even for students who are able to keep up with their payments, student loan debt – even low debt when paired with low earnings – can hold borrowers back from starting a family, buying a home, saving for retirement, starting a business or farm, or saving for their own children’s education. Below are federal policy recommendations to make college more affordable and reduce the burden of student debt, including: • Reducing college costs and students’ need to borrow; • Protecting access to federal student loans; • Ensuring federal loan payments are manageable and fair; • Ensuring students have access to the information they need to make informed choices about where to go to college and how to pay for it; • Improving accountability for colleges that receive federal funding; • Reducing reliance on risky private loans; and • Better targeting federal education tax benefits. These and other recommendations are further detailed in our national student debt policy agenda, available online at ticas.org/initiative/student-debt-policy-agenda. Reduce College Costs and the Need to Borrow The most effective way to reduce student debt is to reduce the amount students are asked to pay, so that students and families can more easily cover college costs with savings, earnings, and grants. • Strengthen Pell Grants. We recommend doubling the maximum federal Pell Grant to restore its purchasing power, and permanently indexing it to inflation to maintain its value going forward. Need-based grants reduce low- and moderate-income students’ need to borrow, yet the Pell Grant currently covers the lowest share of the cost of college in more than 40 years. Additionally, absent Congressional action, next year will be the first time in six years that the grant will not increase with inflation, resulting in further decline of the already low purchasing power of the grant.26 • Ensure Federal Funds Supplement State Investment. We recommend making a significant new federal investment in public higher education contingent on states maintaining or increasing their own investment in public higher education. About three-quarters (76%) of undergraduates attend public colleges,27 where, even after significant recovery, average state funding per student remains 16 percent lower than before the recession.28 Congress should create a new federal/state partnership that includes a strong maintenance of effort provision aimed at maintaining or lowering the net price of public college for low- and moderate-income students.29 THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 14 Protect Access to Federal Student Loans For the students who continue to need to borrow to attend and complete college, federal loans are the safest option available, providing all eligible students with equal access to credit with fixed interest rates, flexible repayment plans, and consumer protections not otherwise available. Without federal loans, students may turn to much riskier forms of credit, such as credit cards, payday loans, or private loans, or forgo college altogether, delay entry, or reduce their odds of success by attending part-time or working too much. Maintaining access to federal student loans includes opposing any proposal that would allow colleges to reduce eligibility for federal student aid for entire groups of students (e.g., by student characteristics or program of study).30 Rather than protect students from excessive borrowing, such proposals are more likely to deny low-income students access to college or to certain programs and careers, undermining the goal of supporting access to a quality education in a program of their choosing, regardless of financial circumstances. Make Loan Repayment Simple, Manageable, and Fair Income-driven repayment (IDR) plans provide a critical safeguard for borrowers by capping monthly payments based on the borrower’s income and family size, and providing a light at the end of the tunnel by forgiving remaining debt after 20 or 25 years of responsible payments. However, the confusion created by having five different IDR plans available today,31 combined with a cumbersome annual income recertification process and insufficient help from student loan servicers, has contributed to under-enrollment among the borrowers who may need IDR the most. • Simplify and Improve Income-Driven Repayment (IDR). To simplify and improve student loan repayment as well as reduce delinquency and default, we recommend streamlining the multiple IDR plans into a single, improved plan that works better for both students and taxpayers. This single IDR plan, paired with the option of a fixed payment plan, would let any borrower choose the assurance of payments capped at 10 percent of income and provide tax-free forgiveness of remaining debt, if any, after 20 years of payments. The plan would also better target benefits to those who need them most, and prevent borrowers with high incomes and high debt from receiving loan forgiveness when they could have afforded to pay more.32 • Make it Easier for Borrowers to Keep Making Payments Based on Income. Rather than having to proactively submit new income information every year or getting their payments bumped up to non-income-based and potentially unaffordable amounts, borrowers should be able to give permission for the Department of Education (the Department) to automatically access their required tax information, permission that the borrower can revoke at any time. This change will help borrowers maintain affordable payments and stay on top of their loans, as well as shrink paperwork and burden for both borrowers and loan servicers. The Departments of Treasury and Education reached an agreement to do this but progress has stalled despite strong bipartisan support in the House and Senate to require that they do so as soon as possible, as well as bipartisan legislation that would require it.33 • Improve Student Loan Servicing. Many struggling federal student loan borrowers who would benefit from IDR plans have not enrolled, and the Department’s own data show that the majority of enrolled borrowers missed their annual income recertification deadline.34 This raises serious questions about the effectiveness of communications from federal loan servicers. Experimental pilots conducted by the Department have helped identify ways that servicer communications can be improved.35 We urge the page 15 STUDENT DEBT AND THE CLASS OF 2016 adoption of consistent, enforceable servicing standards for all student loans, as jointly recommended by the Consumer Financial Protection Bureau and the Departments of Education and Treasury.36 TICAS strongly supported prompt implementation of the Education Department’s July 2016 policy direction on the servicing of all federal student loans to create a more transparent and accountable system that provides high-quality servicing and promotes continuous improvement.37 Unfortunately, in April 2017, the new presidential administration retracted this memo, which included a directive that student loan contractors’ past performance be considered in awarding new contracts.38 Help Students and Families Make Informed Choices Students need readily available, timely, accurate, and comparable information to make informed decisions about where to go to school and how to pay for it. Recent improvements include the use of the tax data available at the time students are filing the FAFSA so students can complete the application earlier, and find out how much federal aid they qualify for before deciding where to apply. The Department’s College Scorecard also increases transparency by highlighting important data on individual colleges’ costs and student outcomes.39 However, key data on student debt are still not available, and it remains too difficult for students to get comparable estimates of how much colleges may cost them, or compare aid offers from different colleges. • Bring Postsecondary Data into the 21st Century. To support more useful, comprehensive, accurate and comparable postsecondary data, we have joined business leaders,40 the Postsecondary Data Collaborative,41 students,42 and policymakers from both sides of the aisle43 in recommending a repeal of the 2008 ban on a student level data network, and the creation of a network with strong protocols for protecting both student privacy and data security. In the meantime, improvements to existing data collection and reporting mechanisms are still urgently needed. For example, total debt at graduation – including both federal and private loans – is not available for every college, nor is debt for each type of credential offered by a given school. We recommend that the Department immediately collect these data from colleges via the Integrated Postsecondary Education Data System (IPEDS). • Consumer Information. Making currently available data more accessible, easier to understand, and easier to compare will help students better identify colleges that provide the best value and fit based on their individual circumstances, needs, and goals. Toward that end, we recommend further improvements to and promotion of the following existing consumer tools: • College Scorecard: The College Scorecard is an interactive online tool that helps consumers quickly and easily understand the chances of completing, borrowing, or ending up with high debt and/or low earnings at a specific school. Additional enhancements to the student debt data in the College Scorecard would increase the usefulness of that information. Cumulative debt figures should be disaggregated by type of credential completed, should allow for state-level figures to be calculated and compared, and should include both federal and private loan debt as soon as they are collected and available. • Net Price Calculators: Nearly all colleges are required to have a net price calculator on their website to provide an individualized estimate of how much the college would cost a particular student, well before he or she has to decide where to apply. Our research has found that many of these calculators are hard to find, use, and compare.44 Bipartisan legislation has been introduced to address these issues, including THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 16 authorizing the creation of a central portal that would let students quickly and easily get comparable net price estimates for multiple colleges at once.45 • Financial Aid Shopping Sheet: The Shopping Sheet is a voluntary standard format for college financial aid offers, designed to make it easy for students to understand and compare the real cost of attending the colleges where they have been accepted. More than 3,000 colleges now use the Shopping Sheet, but many schools still do not use it at all or use it only for some students.46 Students should be able to count on clear and comparable financial aid offers no matter where they apply. Bipartisan legislation has been introduced to require all colleges receiving federal aid to use a similar standardized award letter format.47 • Loan Counseling: By law, all federal student loan borrowers are required to receive entrance and exit counseling. The Department has worked to improve its current online counseling, which is used by thousands of colleges. However, there remains significant potential as well as bipartisan interest in enhancing federal student loan counseling to ensure that students are provided clear, timely, actionable information that is relevant to their borrowing options.48 We support empowering schools to require annual counseling in order to more consistently provide students with information related to their previous and future borrowing decisions without deterring or restricting access to loans that students need to attend and succeed in college. We also encourage the Department to continue evaluating and improving its online tools, including more effective integration of income-driven repayment plan options in exit counseling. Strengthen College Accountability There is strong bipartisan support for improving the current financial aid eligibility system, where the all-or-nothing approach allows schools to too easily maintain the status quo, even if their performance consistently falls near the established threshold for failure. We recommend a new federal aid eligibility policy that supplements rather than replaces other existing accountability measures (e.g., the gainful employment and “90/10” rules). Our proposal to improve the current Title IV eligibility system uses a student-based debt outcome measure to tie federal aid eligibility to the actual financial risk students take by enrolling in, and the risk taxpayers take by subsidizing, a school. Our proposal includes graduated risk-sharing payments to prompt colleges to improve, as well as robust rewards to encourage colleges that serve students well to enroll more low-income students.49 Reduce Risky Private Loan Borrowing There is bipartisan support for ensuring that students take out federal loans before turning to riskier private loans to pay for school.50 Private education loans are one of the riskiest ways to pay for college. Unlike federal loans, they typically have variable interest rates and lack the important borrower protections and repayment options that come with federal loans. Private loans for students are also generally more costly than federal loans, and lower income students usually receive the worst private loan rates and terms.51 Yet almost half of undergraduates who borrow private loans could have borrowed more in safer federal loans.52 We recommend a number of changes to reduce unnecessary reliance on private loans, and enhance protections for private loan borrowers, including: requiring school certification of private loans; restoring fair bankruptcy treatment for private loan borrowers; and encouraging community colleges to participate in the federal loan program. For example, California now page 17 STUDENT DEBT AND THE CLASS OF 2016 requires colleges to clearly indicate if they do not offer federal loans, disclose the average federal and private loan debt of their graduates, and inform students of any untapped federal aid eligibility before certifying any private loan.53 Federal legislation from the 114th Congress would require school certification of private loans and other consumer protections.54 Simplify and Better Target Higher Education Tax Benefits There is bipartisan agreement that higher education tax benefits are overly complex, and their benefits poorly timed and regressive. We recommend streamlining existing education tax benefits by improving the American Opportunity Tax Credit (AOTC) and eliminating benefits that are less effective or targeted, such as the Tuition and Fees Deduction and Lifetime Learning Credit. We also recommend eliminating the taxation of Pell Grants, an unnecessary complexity that keeps many students from accessing tax benefits they qualify for. Additionally, we recommend eliminating the taxation of forgiven federal student loan debt, regardless of the reason it has been discharged. Currently, loan balances discharged after 10 years of payments under the Public Service Loan Forgiveness program (PSLF) are not treated as taxable income. But balances discharged after 20 or 25 years of responsible payments in an income-driven repayment (IDR) plan or due to death or permanent disability are treated as taxable income.55 This disparate tax treatment is inequitable and confusing, and creates a potentially unaffordable tax liability that disproportionately impacts low-income borrowers. THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 18 Methodology: Where the Numbers Come From and How We Use Them Several organizations conduct annual surveys of colleges that include questions about student loan debt, including U.S. News & World Report, Peterson’s (publisher of its own college guides), and the College Board. To make the process easier for colleges, these organizations use questions from a shared survey instrument, called the Common Data Set (CDS). Despite the name “Common Data Set,” there is no actual repository or “set” of data. Each surveyor conducts, follows up, and reviews the results of its own survey independently. For this analysis, we licensed and used the data from Peterson’s.56 This section of the Common Data Set 2016-2017 was used to collect student debt data for the Class of 2016: Note: These are the graduates and loan types to include and exclude in order to fill out CDS H4 and H5. Include: * 2016 undergraduate class: all students who started at your institution as first-time students and received a bachelor’s degree between July 1, 2015 and June 30, 2016. * only loans made to students who borrowed while enrolled at your institution. * co-signed loans. Exclude: * students who transferred in. * money borrowed at other institutions. * parent loans. * students who did not graduate or who graduated with another degree or certificate (but no bachelor’s degree). H4. Provide the number of students in the 2016 undergraduate class who started at your institution as first-time students and received a bachelor’s degree between July 1, 2015 and June 30, 2016. Exclude students who transferred into your institution. _______ H5. Number and percent of students in class (defined in H4 above) borrowing from federal, non-federal, and any loan sources, and the average (or mean) amount borrowed. NOTE: The “Average per-undergraduate-borrower cumulative principal borrowed,” is designed to provide better information about student borrowing from federal and nonfederal (institutional, state, commercial) sources. The numbers, percentages, and averages for each row should be based only on the loan source specified for the particular row. For example, the federal loans average (row b) should only be the cumulative average of federal loans and the private loans average (row e) should only be the cumulative average of private loans. Percent of the class (defined above) who borrowed from the types of loans specified in the first column (nearest 1%) Average per-undergraduate-borrower cumulative principal borrowed from the types of loans specified in the first column (nearest $1) Any loan program: Federal Perkins, Federal Stafford Subsidized and Unsubsidized, institutional, state, private loans that your institution is aware of, etc. Include both Federal Direct Student Loans and Federal Family Education Loans. % $ Federal loan programs: Federal Perkins, Federal Stafford Subsidized and Unsubsidized. Include both Federal Direct Student Loans and Federal Family Education Loans. % $ c) Institutional loan programs. % $ d) State loan programs. % $ e) Private alternative loans made by a bank or lender. % $ Source/ Type of Loan a) b) page 19 STUDENT DEBT AND THE CLASS OF 2016 Number in the class (defined in H4 above) who borrowed from the types of loans specified in the first column We calculated per capita overall debt — the average debt across all graduates whether they borrowed or not — by multiplying the percent with debt by the average debt; per capita federal debt by multiplying the percent with federal debt by the average federal debt; and per capita nonfederal debt by subtracting per capita federal debt from per capita debt. The proportion of debt that is nonfederal is calculated as the per capita nonfederal debt divided by the per capita debt. Except where otherwise noted, in this report the term “colleges” refers to public four-year and nonprofit four-year institutions of higher education that granted bachelor’s degrees during the 2015-16 year and are located in the 50 states plus the District of Columbia. Data Limitations There are several reasons why CDS data (such as the college-level data from Peterson’s) provide an incomplete picture of the debt levels of graduating seniors. Although the CDS questions ask colleges to report cumulative debt from both federal and private loans, colleges may not be aware of all the private loans their students carry. The CDS questions also instruct colleges to exclude transfer students and the debt those students carried in. In addition, because the survey is voluntary and not audited, colleges may actually have a disincentive for honest and full reporting. Colleges that accurately calculate and report each year’s debt figures rightfully complain that other colleges may have students with higher average debt but fail to update their figures, under-report actual debt levels, or never report figures at all. Additionally, very few for-profit colleges report debt data through CDS, and national data show that borrowing levels at for-profit colleges are, on average, much higher than borrowing levels at other types of colleges. See page 4 for more about for-profit colleges. Despite the limitations of the CDS data, they are the only data available that show average cumulative student debt levels for bachelor’s degree recipients, including both federal and private loans, every year and at the college level. While far from perfect, CDS data are still useful for illustrating the variations in student debt across states and colleges. What Data are Included in the State Averages? Our state-level figures are based on the 1,055 public and nonprofit four-year colleges that reported the number of graduating students in the Class of 2016 with loans, the percent of graduates with debt, and the average debt of those who borrowed, and reported in the Peterson’s Undergraduate Financial Aid Survey that they awarded bachelor’s degrees for the Class of 2016.57 These colleges represent 52 percent of all public and nonprofit four-year colleges that granted bachelor’s degrees and 78 percent of all bachelor’s degree recipients in these sectors in 2015-16.58 Nonprofit colleges compose 60 percent of the colleges with usable data, similar to the share they make up of public and nonprofit four-year bachelor’s degreegranting colleges combined (67%). We did not calculate state averages when the usable cases with student debt data covered less than 30 percent of bachelor’s degree recipients in the Class of 2016. We weight the state averages according to the number of borrowers reported in the Peterson’s Undergraduate Financial Aid Survey. The state averages and rankings in this report are not directly comparable to averages in previous years’ reports due to changes in which colleges in each state report data each year, revisions to the underlying data submitted by colleges, and changes in methodology. THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 20 endnotes 1 Note that the data used here and throughout this report include only student loans and do not include federal Parent PLUS loans, which parents of dependent undergraduates can use 17 For more on state loan programs, see TICAS. 2016. Student Debt and the Class of 2015. https://ticas.org/sites/default/files/pub_files/classof2015.pdf. to cover any college costs not already covered by other aid. 18 Unless otherwise noted, only colleges that reported average debt, number with debt, 2 and percent with debt for the Class of 2016 and reported in the Peterson’s Undergraduate U.S. Department of Education. 2017. Data Documentation for College Scorecard (Version: August 2017). https://collegescorecard.ed.gov/assets/FullDataDocumentation.pdf. Accessed September 2, 2017. Financial Aid Survey at least 100 bachelor’s degree recipients in 2015-16 are included in the data about student debt at colleges in this report. 19 University of California. 2016. Accountability Report 2016. Indicator 2.5.3: Student loan debt burden of graduating seniors by parent income, Universitywide, 1999-2000 to 2014The state averages and rankings in this report are not directly comparable to those in 3 15. http://bit.ly/2vVaPIt. previous years’ reports due to changes in which colleges in each state report data each year, revisions to the underlying data submitted by colleges, and changes in methodology. 20 Wisconsin HOPE Lab. 2015. Information, Accountability, and College Costs: The Need for Standardized Living Cost Calculations in Higher Education. http://bit.ly/2y1kA9u. These regions are as defined in: U.S. Census Bureau. Census regions and divisions with State 4 FIPS Codes. http://www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf. Accessed September 7, 2017. 5 See What Data are Included in the State Averages? on page 20. 6 For more on the difficulties borrowers face in repaying private loans, see Consumer 21 For more on TICAS’ research and resources on net price calculators, visit https://ticas. org/net-price-calculator-publications-and-resources. 22 National Association of State Student Grant and Aid Programs (NASSGAP). 2016. 46th Annual Survey Report on State-Sponsored Student Financial Aid: 2014-15 Academic Year. http:// www.nassgap.org/survey/NASSGAP_Report_14-15_final.pdf. Financial Protection Bureau (CFPB). 2015. Annual Report of the CFPB Student Loan Ombudsman. http://bit.ly/1joybQj. 23 Pennsylvania Department of Revenue. 2014. Pennsylvania Personal Income Tax Guide. http://bit.ly/2ehbSyt. See TICAS. 2016. Student Debt and the Class of 2015. https://ticas.org/sites/default/ 7 files/pub_files/classof2015.pdf. As discussed in more detail in A Note About Student Debt Averages Nationwide on page 2, we will update this national figure after the U.S. Department of Education releases the next set of nationally representative data from the National Postsecondary Student Aid Study (NPSAS). Calculations by TICAS on data from the U.S. Department of Education, National 8 24 See California Education Code 69432.7. http://bit.ly/2vQoG2L. 25 Calculations by TICAS using data from the U.S. Department of Education, Federal Student Aid Data Center, “Federal Student Aid Portfolio Summary,” “Direct Loan Portfolio by Loan Status,” and “Direct Loan Portfolio by Delinquency Status.” https://studentaid. ed.gov/sa/about/data-center/student/portfolio. Accessed April 21, 2017. Figures represent Postsecondary Student Aid Study (NPSAS) 2012. These are the most recent data available Direct Loan borrowers whose loans are more than 30 days delinquent, and borrowers who that show the share of graduates with private loans and the average private loan debt of have Direct Loans in different stages of delinquency or default are counted more than once. those who have such debt. 9 Ibid. 26 College costs defined here as average total in-state tuition, fees, room & board costs at public four-year colleges. Calculations by TICAS on data from the College Board, Trends in College Pricing 2016, Table 2, http://bit.ly/2j61cQh, and U.S. Department of Education data 10 For example, Wells Fargo advertised fixed rates up to 14.24% for the Wells Fargo on the maximum Pell Grant. Student Loan for Career and Community Colleges: https://wfefs.wellsfargo.com/terms/ TodaysRates. Accessed September 2, 2017. 27 Calculations by TICAS on 12-month enrollment data for 2015-16 from the U.S. Department of Education, Integrated Postsecondary Education Data System (IPEDS). 11 Calculations by TICAS on data from the U.S. Department of Education, NPSAS 2012. The term “private loans” is defined here to mean bank and lender-originated loans only. 28 Center on Budget and Policy Priorities. 2017. A Lost Decade in Higher Education Funding State Cuts Have Driven Up Tuition and Reduced Quality. http://bit.ly/2vXYJAN. 12 TICAS. 2011. Critical Choices: How Colleges Can Help Students and Families Make Better Decisions about Private Loans. https://ticas.org/content/pub/critical-choices. 29 TICAS. Blog Post. July 28, 2015. “Tuition Free and Debt Free are Not the Same Thing.” https://ticas.org/blog/tuition-free-and-debt-free-are-not-same-thing. 13 MeasureOne. 2017. MeasureOne Webinar: Private Student Loan Market Trends & Insights. http://bit.ly/2xgZztq. 30 Coalition letter to Sen. Alexander, Rep. Kline, Sen. Murray, and Rep. Scott. May 19, 2015. http://bit.ly/2y7g2yd. 14 Consumer Financial Protection Bureau and U.S. Department of Education. 2012. Private Student Loans. http://files.consumerfinance.gov/f/201207_cfpb_Reports_Private-StudentLoans.pdf. “Private loans” refer here to nonfederal loans from banks and lenders made to undergraduates only. 15 Calculations are limited to public and nonprofit four-year colleges and focus on the schools with the highest per capita private loan borrowing amounts. 16 Calculations are limited to public and nonprofit four-year colleges. page 21 STUDENT DEBT AND THE CLASS OF 2016 31 TICAS. Summary of Income-Driven Repayment Plans. http://bit.ly/2cwFk0g. 32 For more information, see TICAS. 2017. Make It Simple, Keep It Fair: A Proposal to Streamline and Improve Income-Driven Repayment of Federal Student Loans. http://bit. ly/2x3jeMW. 33 On October 1, 2015, a bipartisan group of 32 lawmakers urged the Departments of Education and Treasury to automate the annual income recertification process for income-driven plans: http://bit.ly/2cU8zsF. On December 16, a bipartisan group of five 47 Senators did the same: http://bit.ly/2wYN5ae. On January 17, 2017, the Departments of Re-introduce Bipartisan Bills to Help Students Understand Cost of College, Make Cost Sen. Grassley and Sen. Franken. Press Release. April 11, 2017. “Grassley, Franken Education and Treasury announced progress toward putting a multi-year consent system Comparisons Easier.” http://bit.ly/2xBmJbA. in place: http://bit.ly/2gmni1o. And in July 2017 a bipartisan bill was re-introduced that would require the two agencies to automate the process: Rep. Bonamici, Rep. Costello, 48 See, for example, U.S. House of Representatives Committee on Education and the Rep. Meehan, and Rep. Moulton. Press Release. August 3, 2017. “Bonamici, Costello, Workforce. 2016. Bill Summary: The Empowering Students Through Enhanced Financial Moulton, Meehan Introduce Bipartisan Effort to Prevent Student Loan Defaults.” http://bit. Counseling Act. http://bit.ly/2hxHm3Y. See also: Sen. Grassley. Press Release. July 25, 2017. ly/2wVPfrp. “Grassley, Ernst, Franken Introduce Know Before You Owe Federal Student Loan Act of 2017.” http://bit.ly/2vJVGsL. 34 U.S. Department of Education. “Sample Data on IDR Recertification Rates for ED-Held Loans.” Shared at a negotiated rulemaking session on April 1, 2015. http://bit.ly/2eXvKE0. 49 For more information, see TICAS. 2017. A New Approach to College Risk Sharing: Enhancing Accountability to Improve Student Outcomes. http://bit.ly/2fkN9qN. 35 For more information, see The White House, National Science and Technology Council. 2016. Social and Behavioral Sciences Team 2016 Annual Report. http://bit.ly/2cU2M86. 50 See, for example, U.S. House of Representatives Committee on Education and the Workforce. 2016. Bill Summary: The Empowering Students Through Enhanced Financial 36 U.S. Department of the Treasury, U.S. Department of Education, and Consumer Financial Counseling Act. http://bit.ly/2hxHm3Y. Protection Bureau. September 29, 2015. Joint Statement of Principles on Student Loan Servicing. http://bit.ly/1QJXUwz. 51 See TICAS. Private Student Loans Publications and Resources. https://ticas.org/content/ posd/private-loan-publications-and-resources. 37 U.S. Department of Education. July 20, 2016. “Policy Direction on Federal Student Loan Servicing.” http://www2.ed.gov/documents/press-releases/loan-servicing-policy-memo. pdf. 52 Calculations by TICAS on data from the U.S. Department of Education, National Postsecondary Student Aid Study (NPSAS) 2012. For more information about private loans, see TICAS. 2016. Private Loans: Facts and Trends. http://www.ticas.org/files/pub/ 38 U.S. Department of Education. April 11, 2017. Letter from Secretary Betsy DeVos to Chief private_loan_facts_trends.pdf. Operating Officer James Runcie regarding the Student Loan Servicer Recompete. http://bit. ly/2omTMfA. 53 California Assembly Bill No. 721 (2015-16 reg. session). Chaptered October 8, 2015. http://bit.ly/2wr60Yq. 39 For more information, see the U.S. Department of Education. College Scorecard. https:// collegescorecard.ed.gov/. Accessed August 29, 2017. 54 Sen. Durbin, Sen. Reed, and Sen. Franken. Press Release. September 16, 2016. “As Student Loan Debt Tops $1 Trillion, Senators Pushes For Improved Protections For Student 40 Coalition letter to Sen. Alexander and Sen. Murray. April 24, 2015. http://bit.ly/2hubYQF. Borrowers.” http://bit.ly/2cQQ3D9. 41 Coalition letter to President-elect Donald Trump and Presidential Transition Team. 55 December 14, 2016. http://bit.ly/2hlvqRL. See also the coalition letter in support of the TICAS. July 17, 2017. Recommendations to Sen. Hatch on reforming federal education tax benefits. http://bit.ly/2y12inU. bipartisan, bicameral College Transparency Act. May 23, 2017. http://bit.ly/2wSQmby. 56 42 Ravipati, Sri. October 6, 2016. “A Million Students Push for Postsecondary Data Reform.” Peterson’s Undergraduate Financial Aid and Undergraduate Databases, copyright 2017 Peterson’s, a Nelnet company. All rights reserved. Campus Technology. http://bit.ly/2gWez5b. 57 43 Rep. Love. Press Release. May 21, 2015. “Rep. Mia Love Introduces Her First Bill.” http:// Peterson’s Undergraduate Financial Aid and Undergraduate Databases, copyright 2017 Peterson’s, a Nelnet company. All rights reserved. Note that our state-level figures do not bit.ly/2iMeENR; Rep. Mitchell. Press Release. May 17, 2017. “Mitchell and Polis Introduce include colleges that reported no bachelor’s degree recipients to the U.S. Department of the College Transparency Act of 2017.” http://bit.ly/2wJsruB; Sen. Hatch. Press Release. Education, Integrated Postsecondary Education System (IPEDS), http://nces.ed.gov/ipeds/, May 18, 2017. “Hatch Introduces Bipartisan College Transparency Act to Improve Reporting accessed August 3, 2017. of Student Outcomes.” http://bit.ly/2vru4NA. 58 44 TICAS. 2012. Adding It All Up 2012: Are College Net Price Calculators Easy to Find, Use, and Compare? http://www.ticas.org/pub_view.php?idx=859. Out of the 2,402 public four-year and nonprofit four-year colleges in the federal Integrated Postsecondary Education Data System (IPEDS) for 2015-16, 2,025 reported in IPEDS or the Peterson’s Undergraduate Financial Aid Survey that they granted bachelor’s degrees during the 2015-16 year, with 1,802,396 bachelor’s degree recipients (IPEDS) in the 45 Sen. Grassley and Sen. Franken. Press Release. April 11, 2017. “Grassley, Franken Class of 2016. Of these 2,025 colleges, 1,055 colleges are included in our state averages, Re-introduce Bipartisan Bills to Help Students Understand Cost of College, Make Cost with a total of 1,409,918 bachelor’s degree recipients (IPEDS) in the Class of 2016. The Comparisons Easier.” http://bit.ly/2xBmJbA. remaining 970 colleges could not be matched to a specific entry in the Peterson’s dataset, 46 For more information, see U.S. Department of Education. Financial Aid Shopping Sheet. http://www2.ed.gov/policy/highered/guid/aid-offer/index.html. As of July 20, 2017, 3,247 schools were using the Shopping Sheet, 43% of which used it only for students who are veterans. See “Institutions that have adopted the Shopping Sheet.” Accessed August 30, reported no bachelor’s degree recipients to IPEDS, did not respond to the most recent Peterson’s Undergraduate Financial Aid survey, or responded to the survey, but did not report the number of graduating students in the Class of 2016 with loans, the percent of graduates with debt, and the average debt of those who borrowed for the Class of 2016. 2017. THE INSTITUTE FOR COLLEGE ACCESS & SUCCESS page 22 405 14th Street, Suite 1100 Oakland, CA 94612 510.318.7900 110 Maryland Avenue, N.E., Suite 112 Washington, DC 20002 202.223.6060 page STUDENT DEBT AND THE CLASS OF 2016 info@ticas.org www.ticas.org