Smart Borrower Blog

Undergraduates Borrowing More Than Ever Before

Dec 6th, 2010 @ 6:33 AM by Debbie Dragon

According to a new study that was released last month by the Pew Research Center, undergraduates are borrowing money at higher rates than ever before, leaving them with large student loan debt to deal with once they graduate. The study looked at student loans issued in 1996 and then again in 2008. Astonishingly, when an adjustment was made for inflation undergraduate students in 2008 on average borrowed 50% more money than those in 1996. Even more disturbing, the study showed that those borrowing for an associate’s degree borrowed twice as much in 2008 compared to students in 1996.

The study looked at three trends that seem to be impacting the surge in student borrowing. Here is what was found.

More Students Are Borrowing Money Than Ever Before

According to the report, “In 2008, 60% of all graduates had borrowed, compared with about half (52%) in 1996”

Students Are Borrowing More Money Than Any Time In The Past

According to the report, “Among 2008 graduates who borrowed, the average loan for bachelor’s degree recipients was more than $23,000, compared with slightly more than $17,000 in 1996. For associate’s degree and certificate recipients, the average loan increased to more than $12,600 from about $7,600.”

Private for Profit Schools, Where Borrowing Is Traditionally the Highest, Are Seeing An Increase In Student Enrollment

According to the report, Over the past decade, the private for-profit sector has expanded more rapidly than either the public or private not-for-profit sectors. In 2008, these institutions granted 18% of all undergraduate awards, up from 14% in 2003. Students who attend for-profit colleges are more likely than other students to borrow, and they typically borrow larger amounts.”

The report went on to show that about 25% of those who received bachelor degrees from for profit schools, borrowed over $40,000. The percentage was much smaller for public and not for profit schools where those who borrowed 40% or more came in at 5% for public and 14% for nonprofit schools.

Demographics were also found to possibly play a part and showed that those students who graduate from for profit schools, where lending rates are the highest, were demographically different than public and nonprofit schools. For profit schools tended to have more graduates that were in lower income brackets. Additionally, these graduates tended to have higher concentrations of older students, minorities and females in their graduating classes. Graduates were very often independent and many had dependents.


About Debbie Dragon
Debbie Dragon is a full time freelance writer and the co-owner of

Leave a Reply