Weekly Research Digest, 10-24-13


Loans for Educational Opportunity: Making Borrowing Work for Today’s Students
The Hamilton Project, The Brookings Institution, October 2013   

Authors of this report conclude that “we do not have a debt crisis but rather a repayment crisis.” Among the findings: More than two-thirds of all borrowers take out loans for less than $10,000, and 98 percent borrow $50,000 or less--yet seven million student loans are in default. The authors propose what they term “a better model of loan repayment,” namely an income-based repayment system they call Loans for Educational Opportunity (LEO). Through LEO, borrowers would make higher payments as they earned higher income, and the payments would be deducted from each paycheck over a 25-year period. Loans could be paid off faster, which would reduce the interest paid on the loan. The proposed repayment system is intended to address the 98 percent of students who borrow what the authors call “a manageable amount.” 

In the News
Inside Higher Ed - "Income-Based Loans Made Simple"

Degrees of Debt: Student Borrowing and Loan Repayment of Bachelor’s Degree Recipients One Year After Graduating – 1994, 2001, and 2009
NCES 2014-011, U.S. Department of Education, October 2013

Key findings:

  • In each successive cohort, a higher percent of bachelor's degree recipients borrowed to pay for their education (49, 64, and 66 percent, respectively).
  • The average cumulative debt increased with each successive cohort from $15,000 to $22,400 to $24,700.
  • For all three cohorts, the highest rate of borrowing was among graduates of for-profit institutions.
  • Low-income, dependent students had the highest rate of borrowing among students at public and private nonprofit institutions for all three cohorts.
  • In 2009, the percent of borrowers in repayment one year after graduation was lower than in other cohorts.
In The News
Chronicle of Higher Education - "Proportion of Bachelor's-Degree Recipients Who Borrowed Rises to 66%"

Student Financial Aid, Academic Year 2011-12
NCES 2013-178, U.S. Department of Education, October 2013

Among full-time, first-time degree or certificate-seeking undergraduate students receiving any grant aid, differences in average cost of attendance and net price of attendance for the 2011-12 academic year varied by institutional sector. 

  • Public four-year institutions: average cost, $18,300; net price, $11,700
  • Nonprofit four-year institutions: average cost, $35,300; net price, $20,600
  • For-profit four-year institutions: average cost, $27,000; net price, $21,900

Trends in College Pricing 2013 and Trends in Student Aid 2013
Trends in Higher Education Series, College Board, 2013

A major takeaway of both reports was that almost half (49 percent) of the student aid was in the form of grants, the highest percentage in the past ten years. Federal grant aid to undergraduates more than doubled in constant dollars between 2002-03 and 2012-13, representing 24 percent of the total $185 billion in undergraduate aid. The number of Pell Grant recipients increased from 4.8 million in 2002-03 to 8.8 million in 2012-13. The percentage of undergraduates taking out federal loans increased from 24 percent in 2002-03 to 34 percent in 2012-13.

In the News
Inside Higher Ed - "Net Price Rising"
New York Times - "Annual Rise in Cost of Public College Slows"


APSCU Statement on Education and Opportunity in the State of the Union Address Following the conclusion of President Obama's State of the U…

APSCU Releases Best Practices in Financial Literacy For All of Higher Education Recognizing the financial challenges in balancing life’s dem…

Weekly Research Digest, 11-7-13 A snapshot of recently released research, reports, surveys, …



PSCUs open doors to many of the 9 million unemployed and 90 million undereducated Americans by providing a skills-based education. To remain competitive over the next decade, we must identify between 8 and 23 million new workers with postsecondary skills. PSCUs are a necessary part of that solution, having produced over 800,000 degrees last year alone.