Student Debt: Myths and Facts

The Third Edition of CIC's fact sheet, “Student Debt: Myths and Facts” contains new research to set the record straight by countering myths and providing facts about student debt. A number of charts and graphs accompany the key points in the presentation, which includes the following myths and facts. See the slideshow and press coverage below.

View the updated report: Reframing Student Debt Totals


Myth:
Many students owe more than $100,000 when they graduate.
 
Fact:
In 2014, only 4 percent of all borrowers owed $100,000 or more in student debt. The average debt level of bachelor’s degree recipients at private colleges and universities is $19,300—less than the price of a modest automobile and the same level as in 2006–2007. Meanwhile, debt at public institutions continues to rise.
 
 

Myth:
High levels of student debt make private colleges unaffordable.
 
Fact: 
One quarter of students who graduated with a bachelor’s degree from a four-year private college or university did not have any educational debt. For those with debt, the difference between the average debt levels for graduates of public versus private institutions is only $4,100.
 


Myth:
The problem with high levels of debt is even worse because students don’t pay back their loans.
 
Fact:
Students at private colleges are less likely to default on their student loans than those who attend for-profit and public institutions. In the most recent year, only 6 percent of private college students defaulted on their loans, less than half the rate of students at for-profit institutions.
 
Chart:


Myth:
Only wealthy families can afford to send their children to private colleges.
 
Fact:
Private colleges enroll students of all financial backgrounds. In fact, private nondoctoral colleges enroll a larger proportion of low-income students than do public institutions.
 
 

Myth:
It is very difficult to receive financial aid at private colleges.
 
Fact:
A larger proportion of students at private colleges receive financial aid than do students at public institutions. Students enrolled at private colleges are almost twice as likely to receive grants from their college as are students enrolled at public institutions.
 
 
Myth:
Students at public institutions receive more financial aid than do students at private colleges and universities.
 
Fact: 
Students receive more financial aid at private colleges. They receive over three times ($17,088 versus $5,476) the amount of institutional aid as do students at public institutions and over five times ($17,088 versus $3,104) as much as students at for-profit institutions. Private colleges give students nearly six times as much institutional grant aid as does the federal government.
 
 

Myth:
All students enrolled at private colleges pay the same high tuition (irrespective of family income).
 
Fact:
On average, the actual amount students pay at private colleges is less than 60 percent of the total cost  of tuition. Students with lower family incomes pay a much lower percentage of the total costs.
 
 

The presentation includes a number of other factors to consider:
  • Over the past decade, tuition and fees at public institutions have increased twice as fast as at private colleges.
  • The graduation rates at private colleges are higher than those at public and for-profit institutions, even for low-income students.
  • Students at private colleges graduate much sooner (about ten months earlier) than do their peers at public institutions and 48 months earlier than students at for-profit institutions—which means fewer years of paying tuition and a quicker start at earning a salary.
Other charts and graphs in the presentation include:
 

 Press Coverage

 
 

 Contact Information

 
For questions about "Student Debt: Myths and Facts," please contact CIC Director of Research Projects Hollie Chessman at hchessman@cic.nche.edu or (202) 466-7230.