ERIC ED471902: Characteristics of Undergraduate Borrowers: 1999-2000. Postsecondary Education Descriptive Analysis Reports.

92 Pages·1.1 MB·English

by  ERIC

DOCUMENT RESUME
ED 471 902
HE 035 561
Clinedinst, Melissa E.; Cunningham, Alisa F.; Merisotis,
AUTHOR
Jamie P.
Characteristics of Undergraduate Borrowers: 1999-2000.
TITLE
Postsecondary Education Descriptive Analysis Reports.
National Center for Education Statistics (ED), Washington,
.INSTITUTION
DC.; Institute for Higher Education Policy, Washington, DC.
NCES-2003-155
REPORT NO
PUB DATE
2003-01-00
NOTE
91p.; Project Officer, C. Dennis Carroll.
AVAILABLE FROM
ED Pubs, P.O. Box 1398, Jessup, MD 20794-1398. Tel: 877 -433-
7827 (Toll Free).
PUB TYPE
Numerical/Quantitative Data (110)
Reports
Research (143)
EDRS PRICE
EDRS Price MF01/PC04 Plus Postage.
DESCRIPTORS
*Debt (Financial); Higher Education; Loan Repayment; Paying
for College; Profiles; *Student Characteristics; *Student
Loan Programs; *Undergraduate Students
ABSTRACT
This report describes student borrowing by comparing
different groups of undergraduate borrowers. Two sets of borrower groups are
examined: (1) high, medium, low, and nonborrowers as defined by borrowing
from all sources in 1999-2000 (excluding federal Parent Loans for
Undergraduate Students and loans from family or friends); and (2) Stafford
loan maximum borrowers, less-than-maximum borrowers, and Stafford
nonborrowers. The analysis of borrower groups explores demographic and
enrollment characteristics, risk for not persisting to completion of an
educational program, and types of loans and other financial aid received. The
final analysis in the report considers all borrowers as a group and explores
the likelihood of borrowers with certain characteristics obtaining particular
types of financial aid. Twenty-nine percent of undergraduates borrowed from
some source to help finance postsecondary education in 1999-2000. Data from
the 1999 -2000 National Postsecondary Student Aid Study were used for this
report to provide a nationally representative sample of undergraduates
enrolled at postsecondary institutions that participated in federal student
aid programs. Findings show that high borrowers received an average of $9,680
in loan aid. Ninety-eight of high borrowers received Stafford loans and about
one-quarter received private loans. Seventy-one percent of the high borrowers
received some form of grant aid as well in 1999-2000. Borrowers who were
financially independent who attended private-for-profit institutions and who
attended exclusively full time were more likely to have received both federal
Stafford subsidized loans and Stafford unsubsidized loans. Appendixes contain
a glossary and technical notes. (Contains 18 tables, 5 figures, and 12
references.)
(SLD)
Reproductions supplied by EDRS are the best that can be made
from the original document.
Characteristics of
NE
NCES
Undergraduate
National Center for
Education Statistics
Borrowers: 1999-2000
PEDAR
Postsecondary Education
U.S. Department of Education
Institute of Education Sciences
Descriptive Analysis Reports
NCES 2003-155
U.S. DEPARTMENT OF EDUCATION
Office of Educational Research and Improvement
EED CATIONAL RESOURCES INFORMATION
CENTER (ERIC)
This document has been reproduced as
received from the person or organization
originating it.
Minor changes have been made to
improve reproduction quality.
Points of view or opinions stated in this
document do not necessarily represent
official OERI position or policy.
A
L
r.
FR EsT
coWAVALLABLE
" NCES
Characteristics of
.711
Undergraduate
National Center for
Education Statistics
Borrowers: 1999-2000
PE DA IR
Postsecondary Education
Descriptive Analysis Reports
U.S. Department of Education
Institute of Education Sciences
NCES 2003-155
January 2003
Melissa E. Clinedinst
Alisa F. Cunningham
Jamie P. Merisotis
The Institute for Higher Education Policy
C. Dennis Carroll
Project Officer
National Center for
Education Statistics
3
U.S. Department of Education
Rod Paige
Secretary
Institute of Education Sciences
Grover J. Whitehurst
Director
National Center for Education Statistics
Val Plisko
Associate Commissioner
The National Center for Education Statistics (NOES) is the primary federal entity for collecting, analyzing, and
reporting data related to education in the United States and other nations. It fulfills a congressional mandate
to collect, collate, analyze, and report full and complete statistics on the condition of education in the United
States; conduct and publish reports and specialized analyses of the meaning and significance of such
statistics; assist state and local education agencies in improving their statistical systems; and review and report
on education activities in foreign countries.
NOES activities are designed to address high priority education data needs; provide consistent, reliable,
complete, and accurate indicators of education status and trends; and report timely, useful, and high quality
data to the U.S. Department of Education, the Congress, the states, other education policymakers,
practitioners, data users, and the general public.
We strive to make our products available in a variety of formats and in language that is appropriate to a
variety of audiences. You, as our customer, are the best judge of our success in communicating information
effectively. If you have any comments or suggestions about this or any other NOES product or report, we would
like to hear from you. Please direct your comments to:
National Center for Education Statistics
Office of Educational Research and Improvement
U.S. Department of Education
1990 K Street NW
Washington, DC 20006-5651
January 2003
The NOES World Wide Web Home Page is: http://nces.ed.gov
The NOES World Wide Web Electronic Catalog is: http://nces.ed.gov/pubsearch
Suggested Citation
U.S. Department of Education, National Center for Education Statistics. Characteristics of Undergraduate
Borrowers: 1999-2000, NOES 2003-155, by Melissa E. Clinedinst, Alisa F. Cunningham, and Jamie P. Merisotis.
Project Officer: C. Dennis Carroll. Washington, DC: 2003.
For ordering information on this report, write:
U.S. Department of Education
ED Pubs
P.O. Box 1398
Jessup, MD 20794-1398
or call toll free 1-877-4ED-PUBS
Content Contact:
Aurora D'Amico
[phone]
Aurora.D'[email protected]
4
Executive Summary
to completion of an educational program, and
This report describes student borrowing by
types of loans and other financial aid received.
comparing different groups of undergraduate
The final analysis in the report considers all
borrowers. Two sets of borrower groups are
borrowers as a group and explores the likelihood
examined: 1) high, medium, low, and
of borrowers with certain characteristics obtaining
nonborrowers as defined by borrowing from all
particular types of financial aid. Twenty-nine
sources in 1999-2000 (excluding federal Parent
percent of undergraduates borrowed from some
Loans for Undergraduate Students (PLUS) and
source to help finance postsecondary education in
loans from family or friends);1 and 2) Stafford
1999-2000.
loan maximum borrowers (total, subsidized, and
unsubsidized),2 less-than-maximum borrowers,
Data from the 1999-2000 National
and Stafford nonborrowers.3 The analysis of
Postsecondary Student Aid Study (NPSAS:2000)
borrower groups explores demographic and
were used for this report. These data provide a
enrollment characteristics, risk for not persisting
nationally representative sample of
'Borrowers are separated into low, medium, and high
undergraduates enrolled at postsecondary
categories based on the distribution of total amounts
institutions that participated in the federal student
borrowed in 1999-2000 (independent of class level),
aid programs authorized by Title IV of the Higher
approximating quartiles. As a result, low borrowers are
defined as those undergraduate students who borrowed
Education Act.4 NPSAS:2000 includes
$2,625 or less (28 percent), medium borrowers are defined as
information on student demographic and
those undergraduates who borrowed more than $2,625 but
less than $6,625 (51 percent), and high borrowers are defined
enrollment characteristics, the type (level and
as those undergraduates who borrowed $6,625 and above (21
control) of the enrolling institution, and dollar
percent). The cut-points that define these groups correspond
amounts borrowed from various sources in 1999-
with federal Stafford and Perkins loan limits but were not
chosen for this reason.
2000.
2 For the purposes of this report, Stafford Loans include those
provided through the Federal Family Education Loan
Program (FFELP) and the Federal Direct Loan Program. The
Stafford total loan amount includes dollars borrowed under
Profile of Borrower Groups
either or both the subsidized and unsubsidized programs. A
subsidized loan is awarded on the basis of financial need. If a
The profile of borrower groups examines the
student qualifies for a subsidized loan, the federal government
pays the interest on the loan until the student begins
demographic and enrollment characteristics of
repayment, and during authorized periods of deferment
high borrowers as a group and in comparison to
thereafter. An unsubsidized loan is not awarded on the basis
medium, low, and nonborrowers. It also examines
of need. Students who qualify for an unsubsidized loan are
charged interest from the time the loan is disbursed until it is
each group of Stafford maximum borrowers (total,
paid in full.
subsidized, and unsubsidized) individually and in
3Stafford maximum borrowers are those who borrow 100
percent of the federal loan limit under the program in
question. This classification is based on the maximum
4Beginning with NPSAS:2000, institutions must have signed
allowed amounts under the subsidized and unsubsidized
programs for a given student's class level. (See "Appendix a Title IV participation agreement with the U.S. Department
of Education, making them eligible for the federal student aid
AGlossary" for a list of undergraduate loan limits in 1999-
programs, to be included in the institutional sample.
2000.)
Executive Summary
characteristics: delaying enrollment; attending
comparison to their Stafford less-than-maximum
part time; being financially independent; having
and Stafford nonborrower counterparts. Key
dependents other than a spouse; working full time
findings include:
while enrolled; having no high school diploma;
and being a single parent. Nontraditional status
High Borrowers
was defined on a continuum based on the number
of these characteristics. The nontraditional status
High borrowers tended to be older (29
index ranges from minimally nontraditional (one
percent were ages 24-29 and 26 percent
characteristic) to moderately nontraditional (two
were 30 or older), independent students
(64 percent). They also were likely to
or three characteristics) to highly nontraditional
attend exclusively full time (72 percent)
(four or more characteristics) (Horn 1996). The
and to attend 4-year institutions (34
same characteristics that define a nontraditional
percent attended private not-for-profit and
student have also been termed risk characteristics
38 percent attended public 4-year
because they have been shown to be negatively
institutions).
associated with persistence and attainment (Horn
High, medium, and low borrowers were
1996; Horn and Premo 1995).
less likely than nonborrowers to have
been high income and to have worked full
This report uses the index to examine the
time.
percentage of each type of borrower group with
different numbers of risk characteristics and
Stafford Maximum Borrowers
applies the same continuum used to define
Stafford total maximum borrowers and
nontraditional to characterize the degree of risk
subsidized maximum borrowers tended to
from minimal to high. Because research has
be young, single, financially dependent
shown that students who do not attain degrees are
students. In addition, they were more
more likely to default, the analysis focuses on
likely to have had each of these
those with high risk characteristics. Key findings
characteristics than Stafford
include:
nonborrowers. Each group of maximum
borrowers tended to be enrolled
exclusively full time.
High Borrowers
Stafford maximum borrowers tended to
work 1-20 hours (total and subsidized) or
With the exception of students at private
1-20 hours and 35 hours or more
not-for-profit 4-year institutions, high
(unsubsidized). All maximum borrowers
borrowers most often had moderate risk
were less likely than nonborrowers to
(public 4-year institutions, 39 percent; and
have worked full time.
private for-profit institutions, 52 percent)
or moderate and high risk (public 2-year
institutions, 46 and 33 percent) of not
Persistence/Attainment Risk
persisting. High borrowers at private not-
for-profit 4-year institutions were more
A common method of characterizing
likely to have had zero risk characteristics
undergraduate students is to separate students into
(42 percent).
"traditional" and "nontraditional" categories. In a
The proportion of high borrowers with a
1996 NCES study, a broad definition of
high risk for not persisting varied by
nontraditional was used that included seven
iv
Executive Summary
and about one-quarter received private
institution type. At both private not-for-
loans (27 percent).
profit 4-year institutions and public 4-year
institutions, high borrowers were more
Compared to medium and low borrowers,
likely to have had high risk than medium
high borrowers were most likely to have
and low borrowers. At private for-profit
received both Stafford subsidized loans
institutions, however, a lower percentage
and Stafford unsubsidized loans as well as
of high borrowers (28 percent) had high
private loans.
risk than medium borrowers (41 percent).
Seventy-one percent of high borrowers
received some form of grant aid in 1999-
Stafford Maximum Borrowers
2000, averaging $4,667. High, medium,
and low borrowers were more likely to
The highest proportion of Stafford
have received some form of grant aid and
maximum borrowers (total, subsidized,
to have received higher average amounts
and unsubsidized) at private not-for-profit
compared to nonborrowers.
4-year institutions and public 4-year
institutions had zero risk characteristics
(were traditional students). At public 2-
Stafford Maximum Borrowers
year institutions, they primarily had
In 1999-2000, 80 percent of Stafford total
moderate risk (unsubsidized) or moderate
maximum borrowers received subsidized
and high risk (subsidized). Those at
loans, and 59 percent received
private for-profit institutions primarily
unsubsidized loans. Stafford maximum
had moderate risk.
borrowers also received private loans
In all four institution types, Stafford total
(total maximum borrowers, 13 percent;
maximum and unsubsidized maximum
subsidized maximum borrowers, 11
borrowers were less likely to have had
percent; and unsubsidized maximum
high risk for not persisting than their less-
borrowers, 11 percent).
than-maximum borrower and nonborrower
Each group of maximum borrowers was
counterparts.
more likely to have received private loans
and to have received higher average
Types and Source of Financial Aid
amounts than less-than-maximum
borrowers and nonborrowers.
Many borrowers also received other types of
Most maximum borrowers received some
financial aid (loans, grants, and work-study).
form of grant aid (total maximum
Thus, this profile also looks at the other types of
borrowers, 67 percent; subsidized
aid that were received by each borrower group as
maximum borrowers, 80 percent; and
well as average amounts received. It explores the
unsubsidized maximum borrowers, 54
various ways in which borrowers finance college
percent).
attendance in addition to borrowing. Key findings
include:
Who Receives Financial Aid
All borrowers as a group were examined to
High Borrowers
determine whether borrowers with certain
demographic and enrollment characteristics were
High borrowers received an average of
more likely to have received specific types of
$9,680 in loan aid. Ninety-eight percent of
high borrowers received Stafford loans
loans and other aid or differing average amounts
Executive Summary
institutions), and who attended
in 1999-2000. The main differences are related to
exclusively full time (versus less than half
federal Stafford loans (subsidized and
time) were more likely to have received
unsubsidized) and private loans. Three
both federal Stafford subsidized loans and
multivariate analyses were conducted to examine
Stafford unsubsidized loans.
the independent association of certain
characteristics with having received each of these
Private Loans
types of loans by adjusting for covariation among
Borrowers who attended less than half
the characteristics examined. Key findings
time (versus exclusively full time), who
include:
attended a private not-for-profit 4-year
institution (versus a public 4-year
institution or a private for-profit
Stafford Loans
institution), and who were high or middle
income (versus low income) received
Borrowers who were financially
private loans at a higher rate.
independent (versus dependent), who
attended private for-profit institutions
(versus private not-for-profit 4-year
vi
Foreword
This report describes the population of undergraduate students who borrowed to help
finance their college attendance during 1999-2000. Two sets of borrower groups were
considered: 1) high, medium, low, and nonborrowers as defined by borrowing from all sources;
and 2) Stafford loan maximum borrowers (total, subsidized, and unsubsidized), less-than-
maximum borrowers, and Stafford nonborrowers. The study explores the demographic and
enrollment characteristics of these borrowers as well as their risk for not persisting to completion
of an educational program and the various types of loans and other financial aid they received.
The report also looks at all borrowers as a group and explores the likelihood of borrowers with
certain characteristics obtaining particular types of financial aid.
Data from the 1999-2000 National Postsecondary Student Aid Study (NPSAS:2000) were
used for this report. These data provide a nationally representative sample of undergraduates
enrolled at postsecondary institutions that participated in the federal student aid programs
authorized by Title IV of the Higher Education Act. NPSAS:2000 includes information on
student demographic and enrollment characteristics, the type (level and control) of the enrolling
institution, and dollar amounts borrowed from various sources in 1999-2000.
The NCES Data Analysis System (DAS), a microcomputer application that allows users to
generate tables for NPSAS:2000, as well as several other NCES surveys, was used to produce the
estimates presented in this report. To allow researchers to perform tests of statistical significance,
the DAS produces design-adjusted standard errors necessary for this purpose. Please consult
Appendix B for more information on the DAS.
vii
Acknowledgments
Many individuals made important contributions to this report. At the Institute for Higher
Education Policy, Deanna High, Project Editor, contributed greatly to the clarity and structure of
the report.
The initial analysis plan and data tables for the study were reviewed by the following
individuals: Sandra Garcia, Paula Knepper, Dan Madzelan, Jon Oberg, and John Wirt at the U.S.
Department of Education; Jaci King at the American Council on Education (ACE); and Pat
Smith at the American Association of State Colleges and Universities (AASCU).
The report draft was reviewed by the following adjudication members at the U.S.
Department of Education: Stephen Broughman, Daniel Goldenberg, and John Wirt. Kenneth
Redd at the National Association of Student Financial Aid Administrators (NASFAA) also
served on the adjudication panel. Karen O'Conor served as the adjudicator, and Paula Knepper
served as the NCES Postsecondary Technical Reviewer.
We gratefully acknowledge the help of these individuals who made valuable contributions
to the final report.