Graduating into Debt
Results of the Nebraska Student Loan Survey
Educational borrowing, a critical factor in access and choice for postsecondary education, is increasing for Nebraska students. Over the past 10 years, educational borrowing in the public postsecondary sector has increased nearly 215 percent.
The median educational loan debt for respondents to the Nebraska Student Loan Survey is $13,327.
Over half the respondents indicated that they felt heavily burdened by their student loan payments and an additional 30 percent indicated that they were at least moderately burdened.
Despite perceptions of heavy burden, nearly three-fourths of the respondents believed that educational borrowing was worth the investment.
Certain "pockets" of students felt more heavily burdened than others. For example, greater percentages of students with a higher degree of education attained, those in certain majors, those with smaller annual incomes, and those attending higher priced institutions reported feeling heavily burdened.
While many factors may contribute to a student's decision to leave the state after graduation, educational borrowing may be a factor in the State's ability to retain students who were Nebraska residents before college.
Although 75 percent of the respondents who were Nebraska residents before college remained Nebraska residents after college, the 25 percent who left included a higher number of Nebraskans with bachelors and graduate degrees. Their median educational indebtedness was over $3000 higher than those who stayed.
Nebraskans who left the state enjoyed higher median annual personal incomes than those who stayed. The monthly educational loan payments of Nebraskans who left the state were higher than the payments of those who stayed. However, a greater percentage of those who left the state reported that, over time, these payments became much easier to make than for those who stayed in the state.
Families who want their children to attend college without being heavily burdened by educational loans should maximize investments and savings for college.
High school counselors, financial aid administrators and others who advice college-bound students may wish to use data from Graduating into Debt to discuss the burdens that arise from heavy student borrowing.
The Legislature is encouraged to continue to increase state appropriations for undergraduate need-based grants to minimize the extent to which financially-needy Nebraska students rely on student loans.
The Legislature may want to consider the creation and funding of a need-based grant program for graduate and professional students. However, appropriations should not be diverted from undergraduate need-based grants to fund such a program.
The Legislature is encouraged to continue its longstanding policy of increasing financial support to higher education to help Nebraska public institutions maintain relatively moderate tuition and fee rates.
The Legislature may want to consider enacting policies and programs that would help make educational loan payments more manageable for student borrowers who remain in Nebraska, such as :
- A program under which Nebraska postsecondary graduates would qualify for state-funded educational loan discharges up to certain specified amounts after the students complete a number of years in particular "high need" occupations within Nebraska.
- Using the Nebraska tax code to provide employers with incentives (e.g., tax deductions or tax credits) to help repay their employees' educational debts.
Additional research should be conducted to determine the impact of educational borrowing on Nebraska students including:
- A follow-up study conducted for the specific purpose of measuring the impact of educational debt on Hispanics, African-Americans, and Native Americans in Nebraska.
- A follow-up study on how heavy educational borrowing influences postsecondary access and choice among Nebraskans from low and moderate-income families.
- Follow-up research on the number of Nebraska student borrowers whose post-collegiate incomes are at or near the State's "livable wage levels," the effect of student loan payments on these borrowers, and way to mitigate any negative effects of student loan payments on such Nebraskans.