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PEDAR: Executive Summary Debt Burden Four Years Later
Borrowing for Education
Debt Status in 1997
Debt Burden
Research Methodology
Full Report (PDF)
Executive Summary (PDF)

Federal student loan programs are a major source of financial aid for students in postsecondary education. Loans provide students lacking the financial resources to attend college with a way to invest in their futures. However, excessive borrowing can cause problems later. Therefore, it is important to identify and describe the postgraduation consequences of borrowing and to understand what levels of borrowing may cause trouble later on.

This study examines the debt of 1992–93 bachelor’s degree recipients in light of their financial circumstances in 1997, approximately 4 years after they earned their degree. First, it reviews the amount they borrowed as undergraduates and describes any additional borrowing by those who had enrolled in a graduate degree program. Amounts borrowed through student loan programs, from parents, and from other private sources are all included. Next, it examines the progress that borrowers had made in repaying their student loans by 1997. Finally, the study describes their debt burden by examining the relationship between student loan payments and income and by searching for other indications of the impact of borrowing. It does this by comparing borrowers at various levels with nonborrowers in terms of their expenditures for certain major items such as rent or a mortgage, a car, and credit card purchases, and by examining how borrowing affects specific lifestyle choices such as family formation, buying a home or car, and saving. The analysis uses data collected through the 1992–93 Baccalaureate and Beyond Longitudinal Study (B&B:1993) and the two follow-ups conducted in 1994 and 1997 (B&B:1993/1994 and B&B:1993/1997).

The analysis distinguishes among three groups of undergraduate borrowers:

  1. those with no further postsecondary enrollment by 1997 (53 percent of all undergraduate borrowers);

  2. those who enrolled for further postsecondary education after receiving their bachelor’s degree but nevertheless were in repayment in 1997 (24 percent of all undergraduate borrowers); and

  3. those who enrolled for further education but were not in repayment in 1997 (23 percent of all undergraduate borrowers).

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