Indicator: Cumulative student debt
Definition
The total amount of student loans individuals take out while enrolled in college.
RECOMMENDED METRIC(S)
Median student debt
Type(s) of Data Needed
Administrative dataWhy it matters
Higher student loan debt is associated with decreased rates of home ownership and worse mental health outcomes. Compared to their peers, Black students take out loans more often than other racial and ethnic groups, and have more debt on average. Though the amount of debt students accumulate during college is affected by student-level factors such as their expected family contribution (EFC), system-level factors such as the tuition and fees charged by institutions and the amount of grant aid made available to students are the largest contributors to rising student debt. Several factors, including the sector of the institution the student attended, the student’s grade point average (GPA) in college, whether the student attained a degree, and their labor market outcomes, also predict the probability of loan default. In particular, students attending for-profit institutions, who tend to be Black at disproportionately high rates, are at especially high risk for loan default.
What to know about measurement
The College Scorecard publicly reports institution-level median student loan debt, drawing on individual-level data in the National Student Loan Data System (NSLDS). However, because information on race and ethnicity is not yet collected on the Free Application for Federal Student Aid (FAFSA) form, regular disaggregation of student debt by race and ethnicity requires NSLDS data to be linked to institutional or state records.
E-W Case Studies
Source frameworks
This indicator appeared in two source frameworks reviewed for this report. Our proposed definition and measure align with work by the Institute for Higher Education Policy.
References
The framework's recommendations are based on syntheses of existing research. Please see the framework report for a list of works cited.