NASFAA Conference 2002 New Orleans, Louisiana Student Loans and Graduate School/Career Choices Donald E. Heller Center for the Study of Higher Education The Pennsylvania State University
Outline Portrait of the Class of 1993 Borrowing and repayment patterns Post-baccalaureate job and graduate school choices Student loan repayment burden Joint determinants of graduate school enrollment An update since 1993 Conclusions and discussion 2002, Donald E. Heller 1
Data Source NCES, Baccalaureate and Beyond Survey 11,000 graduating students in 1992-1993 1993 academic year Statistically representative of the population of bachelor s degree recipients that year (1.2 million) Surveyed: Final year in college One year after graduation (1994) Four years after graduation (1997) 2002, Donald E. Heller 2
Portrait of the Class of 1993 Graduates 0.6% 4.6% 6.1% 5.0% All Students 0.7% 4.8% 10.0% 7.0% 83.7% 77.5% Native Asian /Pacific Islander African Hispanic White Native Asian /Pacific Islander African Hispanic White 2002, Donald E. Heller 3
Majors Science & Math 10% Humanities 10% Computers & Engineering 9% Health Professions 7% Business & Mgmt. 25% Other 11% Education 13% Social & Behavioral Sciences 15% 2002, Donald E. Heller 4
Other Statistics Gender: 55% female Dependency: 59% dependent Sector: 67% public, 56% doctoral-granting Mean Independents: $23,012 Dependents: $65,621 Census All families with 2 or more children under 18: $40,500 Mean cost: $4,403 tuition, $11,400 COA 2002, Donald E. Heller 5
Borrowing Patterns by Race Proportion Borrowing* Mean Amount Borrowed* All students 50% All students $10,142 Native Asian 43% 65% Native Asian $10,665 $11,614 African 64% African $9,218 Hispanic 60% Hispanic $7,789 White 48% White $10,325 0% 20% 40% 60% 80% $0 $5,000 $10,000 $15,000 *Statistically significant difference 2002, Donald E. Heller 6
Proportion of Students Borrowing Dependent Students* Independent Students* Lower 69% Lower 68% Lowermiddle 52% Lowermiddle 69% Middle 35% Middle 61% Uppermiddle 35% Uppermiddle 56% Upper 23% Upper 42% 0% 20% 40% 60% 80% 0% 20% 40% 60% 80% 2002, Donald E. Heller 7
Mean Amount Borrowed Dependent Students* Independent Students* Lower $10,271 Lower $11,320 Lowermiddle Middle $9,272 $10,555 Lowermiddle Middle $9,501 $9,475 Uppermiddle Upper $12,065 $12,754 Uppermiddle Upper $8,908 $8,469 $0 $5,000 $10,000 $15,000 $0 $5,000 $10,000 $15,000 2002, Donald E. Heller 8
Borrowing Patterns by Tuition Proportion Borrowing Mean Amount Borrowed* Lowest tuition 46% Lowest tuition $8,030 Low-middle tuition 48% Low-middle tuition $8,644 Middle tuition 50% Middle tuition $8,886 Uppermiddle tuition Highest tuition 52% 52% Uppermiddle tuition Highest tuition $9,863 $14,802 0% 20% 40% 60% 80% $0 $5,000 $10,000 $15,000 2002, Donald E. Heller 9
Repayment Patterns Students Not Enrolled in Graduate School $14,000 $12,000 $10,000 Total borrowed Balance - 1994 Balance - 1997 $8,000 $6,000 $4,000 $2,000 $0 All students Asian African Hispanic White 2002, Donald E. Heller 10
Repayment Patterns Students Not Enrolled in Graduate School $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Lower Lowermiddle Total borrowed Balance - 1994* Balance - 1997* Middle Dependent Students Uppermiddle Upper 2002, Donald E. Heller 11
Repayment Patterns Students Not Enrolled in Graduate School $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Lower Total borrowed* Balance - 1994* Balance - 1997* Middle Independent Students Lowermiddle Uppermiddle Upper 2002, Donald E. Heller 12
Repayment Patterns Students Enrolled in Graduate School Percentage of Total Loans Outstanding 100% 77% 80% 60% 1994 1997 82% 67% 64% 40% 35% 20% 0% Undergraduate Borrowers Only Graduate Borrowers Only Borrowers at Both Levels 2002, Donald E. Heller 13
Post-baccalaureate status Four categories Enrolled in graduate school and not working (outside of school-related employment) Both enrolled and working Working and not enrolled Neither working nor enrolled Examined status in 1994 and 1997 2002, Donald E. Heller 14
Status in 1994 by Race* 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% All students Asian African Hispanic White School only School & work Work only Neither 2002, Donald E. Heller 15
Status in 1994 by Major* 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Humanities Social & behavioral sci. Science & math Computers & engineering Education Business & mgmt. Health professions Other School only School & work Work only Neither 2002, Donald E. Heller 16
Status in 1997 by Race* 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% All students Asian African Hispanic White School only School & work Work only Neither 2002, Donald E. Heller 17
Status in 1997 by Major* 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Humanities Social & behavioral sci. Science & math Computers & engineering Education Business & mgmt. Health professions Other School only School & work Work only Neither 2002, Donald E. Heller 18
Occupation Choice by Race 1994* 1997* All Students Asian African Hispanic White All Students Asian African Hispanic 0% 20% 40% 60% 80% 100% Professional Blue Collar Technical Other White Collar Clerical Other White 0% 20% 40% 60% 80% 100% 2002, Donald E. Heller 19
Salaries and Repayment Burdens - 1994 $32,000 $30,000 $28,000 Computers & Engineering Health professions Other Annual Salary $26,000 $24,000 Business & Mgmt. All Students Education $22,000 Science & Math Social Sciences Humanities $20,000 6% 7% 8% 9% 10% 11% 12% Loan Burden 2002, Donald E. Heller 20
Salaries and Repayment Burdens - 1997 $45,000 $40,000 Computers & Engineering Health professions Annual Salary $35,000 $30,000 Business & Mgmt. Other Social Sciences All Science & Math Students Education Humanities $25,000 4% 5% 6% 7% 8% 9% 10% Loan Burden 2002, Donald E. Heller 21
Salaries and Repayment Burdens $40,000 $35,000 Public Doctoral Private Doctoral Private Nondoctoral Annual Salary $30,000 $25,000 Public Nondoctoral Public Doctoral Private Doctoral Public Nondoctoradoctora Private Non- $20,000 6% 7% 8% 9% 10% 1994 1997 Loan Burden 2002, Donald E. Heller 22
Joint Determinants of Graduate Enrollment Logistic regression models predicting whether individuals would enroll in graduate school by 1994 and 1997 Factors examined Student background (sex, race, age,, dependency, parental education) Undergraduate institution (sector, tuition rate) Undergraduate academic (major, degree expectation, GPA) Post-baccalaureate (marital status, children) Undergraduate borrowing (total amount) 2002, Donald E. Heller 23
Predictors of Graduate Enrollment by 1994 Proportion enrolling: 16% Predictive factors % impact Independent students -6% Age as of 12/31/92 +2% per 5 years Undergraduate sector: Public non-doctoral -3% Private non-doctoral -5% Degree expectation: Bachelor s -16% Doctorate or 1 Prof. +28% and +30% Majors: Science & math, computers & engineering, education +8% to +12% Undergraduate GPA (per point) +15% Married -4% Total borrowing (per $1,000) -0.1% 2002, Donald E. Heller 24
Predictors of Graduate Enrollment by 1997 Proportion enrolling: 30% Predictive factors % impact Independent students -6% Age as of 12/31/92 +3% per 5 years Parental education: HS grad or less -5% Bachelor s degree -4% Undergraduate sector: Public non-doctoral -3% Private non-doctoral -5% Degree expectation: Bachelor s -27% Doctorate or 1 Prof. +31% and +38% Majors (other than business): +7% to +20% Undergraduate GPA (per point) +18% Number of children: One, 2 or more -4% and 5% Total borrowing (per $1,000) -0.2% 2002, Donald E. Heller 25
Update Since 1993 Loan limits increased in 1992 reauthorization of HEA Dependents: from $17,250 to $23,000 Independents: from $37,250 to $46,000 PLUS: from $4,000 to no limit Needs analysis liberalized Tuition has continued to increase Borrowing has increased 2002, Donald E. Heller 26
Federal Loan Program Borrowing Since 1993 $20,000 $16,000 Private Institutions Public Institutions $13,983 $17,250 $15,375 $12,000 $9,793 $10,342 $8,000 $6,449 $4,000 $0 1992-93 1995-96 1999-2000 ACE, Student Borrowing in the 1990s 2002, Donald E. Heller 27
Conclusions While there are real differences in borrowing and repayment patterns, total borrowing has little impact on enrollment in graduate school when other factors are taken into account Academic factors degree expectation, major, GPA are much stronger predictors of enrollment An important caveat: Borrowing has continued to increase, so we do not know yet if it has reached a level where it does impact graduate enrollment 2002, Donald E. Heller 28
For more information Lumina Foundation (to download the report): http://www.luminafoundation.org My website: http://www.personal.psu.edu/deh29 2002, Donald E. Heller 29