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Third of Student Debt Owned by Only 6% of Borrowers

Students protest debt borrowed for college and university.
Students protest debt borrowed for college and university.

One-third of outstanding U.S. student loan debt is owned by only 6% of all student loan borrowers, according to a new report.

The public policy nonprofit Brookings Institution released a report this week clarifying where all of that $1.5 trillion student debt comes and goes.

"A very small fraction of all student loan borrowers have very large loans. Six percent of borrowers owe more than $100,000 in debt, with 2% owing more than $200,000," the report by Brookings' Kadija Yilla and David Wessel found. "This 6% owes one-third of the outstanding $1.5 trillion of debt.

"At the other extreme, 18% of borrowers owe less than $5,000 in student loan debt. They collectively owe 1% of the debt outstanding," the report stated.

About one-quarter of those with student loans borrowed for graduate school, Brookings said, but that one-quarter owns about half of all outstanding student loan debt.

"While only a small share of households with student debt have a graduate degree, loans associated with graduate degrees account for 50% of the total outstanding student loan debt," the report said. Households with student debt headed by someone without a bachelor’s degree account for only one-quarter of total outstanding debt.

And those who owe the most are not the ones defaulting on debt, the Brookings report said.

Brookings said borrowers with graduate degrees who own half of all student debt are the least likely to default. Who has higher default rates? Those who attend for-profit universities, like DeVry and the University of Phoenix.

In February 2018, U.S. President Donald Trump was required to pay $25 million to settle class-action lawsuits accusing Trump University of fraud after failing to deliver on promises to teach students how to succeed in the real estate sector.

"Forty percent of borrowers from for-profit, two-year programs default on their loans within five years," the report said. Just under one-third of borrowers who attended for-profit four-year programs "defaulted in this same timeframe."

Among students who borrowed to attend public community colleges, about 25% default within five years of entering repayment.

Defaults are much less frequent among those who borrowed to go to public or private nonprofit four-year schools.

Student debt is not all about tuition. In some cases, room and board, books, transportation and other living expenses cost well above tuition.

"Many students borrow to not only cover their tuition and fees but also to get cash to finance the cost of living while they are in school," Brookings reported.

Some public schools offer students "tuition free" financial aid. But that doesn't include the dorm or rental housing, or food. For students at public universities and colleges who pay no tuition, 22% borrow $30,000 or more. The average student borrows $24,000, Brookings said, based on an Urban Institute analysis conducted using the National Postsecondary Student Aid Study.

And what about all those young college students receiving bachelor's degrees from four-year colleges and universities? They graduate with little to no debt, Brookings said.

"Thirty percent of all bachelor’s degree recipients graduate with no debt," Brookings reports. "Another 23% graduate with less than $20,000 in loans."

Fewer than 20% of all borrowers owed more than $40,000. Only 12% of those who attended four-year public colleges owed more than $40,000.

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International students may be able to get jobs at school 

FILE - Northeastern University graduate student Shabbir Hussain, of Indore, India, left, views a computer screen at the entrance to the Snell Library on the Northeastern University campus in Boston on May 24, 2016.
FILE - Northeastern University graduate student Shabbir Hussain, of Indore, India, left, views a computer screen at the entrance to the Snell Library on the Northeastern University campus in Boston on May 24, 2016.

International students studying in the United States may be able to work on campus.

Jobs can include working in libraries, labs, food service and dormitories – but students will have to research the rules before applying for jobs, according to U.S. News & World Report. (September 2024)

Report says college rankings have the potential to mislead

FILE - Students walk at Main Quadrangle on the University of Chicago campus, Monday, May 6, 2024, in Chicago.
FILE - Students walk at Main Quadrangle on the University of Chicago campus, Monday, May 6, 2024, in Chicago.

Each year, prominent lists of college and university rankings are compiled and released to the public, but a report conducted by NORC at the University of Chicago says those rankings have the potential to mislead.

Writing in Forbes, Vanderbilt University Chancellor Daniel Diermeier says changing methodologies can distort results, and profit motives can create doubt. He argues that rankings should be replaced by an objective rating system. (September 2024)

College athletes push for voter turnout while largely avoiding controversy as election nears

FILE - A 5.8-meter Airstream Caravel on loan to the League of Women Voters of Ohio visits the main campus of the Ohio State University in Columbus, Ohio, Sept. 26, 2024, as the group works to register and engage student voters.
FILE - A 5.8-meter Airstream Caravel on loan to the League of Women Voters of Ohio visits the main campus of the Ohio State University in Columbus, Ohio, Sept. 26, 2024, as the group works to register and engage student voters.

Lily Meskers faced an unexpected choice in the lead-up to the first major election she can vote in.

The 19-year-old University of Montana sprinter was among college athletes in the state who received an inquiry from Montana Together asking if she was interested in a name, image and likeness deal to support Sen. Jon Tester, a three-term Democrat seeking re-election. The group, which is not affiliated with the Tester campaign, offered from $400 to $2,400 to athletes willing to produce video endorsements.

Meskers, who is from Colorado but registered to vote in Montana, decided against the deal because she disagrees with Tester's votes on legislation involving transgender athletes in sports.

"I was like, OK, I believe that this is a political move to try to gain back some voters that he might have lost," Meskers said. "And me being a female student-athlete myself, I was not going to give my endorsement to someone who I felt didn't have the same support for me."

Professional athletes such as LeBron James, Colin Kaepernick and Stephen Curry have taken high-profile stances on hot-button topics and political campaigns in recent years, but college athletes are far less outspoken — even if money is available, according to experts in the NIL field. Being outwardly political can reflect on their school or endanger potential endorsement deals from brands that don't want controversy. It can certainly establish a public image for an athlete — for better or for worse — or lead to tensions with teammates and coaches who might not feel the same way.

There are examples of political activism by college athletes: A Texas Tech kicker revealed his support for former President Donald Trump on a shirt under his uniform at a game last week and a handful of Nebraska athletes a few days ago teamed up in a campaign ad against an abortion measure on the Tuesday's ballot.

Still, such steps are considered rare.

"It can be viewed as risky and there may be people telling them just don't even take that chance because they haven't made it yet," said Lauren Walsh, who started a sports branding agency 15 years ago. She said there is often too much to lose for themselves, their handlers and in some cases, their families.

"And these individuals still have to figure out what they're going to do with the rest of their lives, even those that do end up getting drafted," she added.

College coaches are not always as reticent. Auburn men's basketball coach Bruce Pearl has used social media to make it clear he does not support Kamala Harris, Trump's Democratic opponent in next week's presidential election. Oklahoma State football coach Mike Gundy once caused a stir with a star player for wearing a shirt promoting a far-right news outlet.

Blake Lawrence, co-founder of the NIL platform Opendorse, noted that this is the first presidential election in the NIL era, which began in July 2021. He said athletes are flocking to opportunities to help increase voter turnout in the 18-to-24 age demographic, adding that one of his company's partners has had 86 athletes post social media messages encouraging turnout through the first half of the week.

He said athletes are shying away from endorsing specific candidates or causes that are considered partisan.

"Student-athletes are, for the most part, still developing their confidence in endorsing any type of product or service," he said. "So if they are hesitant to put their weight behind supporting a local restaurant or an e-commerce product, then they are certainly going to be hesitant to use their social channels in a political way."

Giving athletes a voice

Many college athletes have opted to focus on drumming up turnout in a non-partisan manner or simply using their platforms to take stands that are not directly political in nature. Some of those efforts can be found in battleground states.

FILE - Phoenix Mercury guard Natasha Cloud (0) celebrates after making a shot while fouled during the first half of a WNBA basketball game against the Minnesota Lynx, May 31, 2024, in Minneapolis.
FILE - Phoenix Mercury guard Natasha Cloud (0) celebrates after making a shot while fouled during the first half of a WNBA basketball game against the Minnesota Lynx, May 31, 2024, in Minneapolis.

A progressive group called NextGen America said it had signed players in Arizona, Michigan, Nevada, New Hampshire, Pennsylvania and Virginia to encourage voting among young people. Another organization, The Team, said it prepped 27 college athletes in Pennsylvania, North Carolina, Arizona and Michigan to lead volunteer voter participation opportunities for students. The organization also said it got more than 625 coaches to sign a nonpartisan pledge to get their athletes registered to vote.

The Team's executive director is Joe Kennedy, a former coach who coordinated championship visits and other sporting events at the White House during President Barack Obama's administration. In early October, it hosted a Zoom event during which panelists such as NCAA President Charlie Baker and WNBA players Nneka Ogwumike and Natasha Cloud gave college athletes advice about using their platforms on campus.

In its early days, The Team seized upon momentum from the record turnout seen in the 2020 election. The NCAA that year said Division I athletes could have Election Day off from practice and play to vote. Lisa Kay Solomon, founder of the All Vote No Play campaign, said even if the athletes don't immediately take stands on controversial issues, it's important for them to learn how.

"It is a lot to ask our young people to feel capable and confident on skills they've never had a chance to practice," Solomon said. "We have to model what it means to practice taking risks, practice standing up for yourself, practice pausing to think about what are the values that you care about — not what social media is feeding into your brain, but what do you care about and how do you express that? And how do you do it in a way that honors the kind of future that you want to be a part of?"

Shut up and play?

Two years ago, Tennessee-Martin quarterback Dresser Winn said he would support a candidate in a local district attorney general race in what experts said was very likely the first political NIL deal by a college athlete.

There have been very few since.

The public criticism and fallout for athletes who speak out on politics or social issue can be sharp. Kaepernick, the Super Bowl-winning quarterback of the San Francisco 49ers, hasn't played in an NFL game since January 2017, not long after he began kneeling during the national anthem at games.

Meskers, the Montana sprinter, said political endorsements through NIL deals could create problems for athletes and their schools.

"I just think that NIL is going to run into a lot of trouble and a lot of struggles if they continue to let athletes do political endorsements," she said. "I just think it's messy. But I stand by NIL as a whole. I think it's really hard as a student athlete to create a financial income and support yourself."

Walsh said it's easier for wealthy and veteran stars like James and Ogwumike to take stands. James, the Los Angeles Lakers star, started More Than a Vote — an organization with a mission to "educate, energize and protect Black voters" — in 2020. He has passed the leadership to Ogwumike, who just finished her 13th year in the WNBA and also is the president of the Women's National Basketball Players Association. More than a Vote is focused on women's rights and reproductive freedom this year.

"They have very established brands," Walsh said. "They know who they are and they know what their political stance is. They know that they have a really strong following that -- there's always going to be haters, but they're also always going to have that strong following of people who listen to everything that they have to say."

Andra Gillespie, an associate professor at Emory University who teaches African American politics, also said it is rare that a college athlete would make a significant impact with a political stand simply because they tend to have a more regional platform than national. Even celebrities like Taylor Swift and Eminem are better at increasing turnout than championing candidates.

"They are certainly very beneficial in helping to drive up turnout among their fans," Gillespie said. "The data is less conclusive about whether or not they're persuasive – are they the ones who are going to persuade you to vote for a particular candidate?"

Athletes as influencers

Still, campaigns know young voters are critical this election cycle, and athletes offer an effective and familiar voice to reach them.

Political and social topics are not often broached, but this week six Nebraska athletes — five softball players and a volleyball player — appeared in an ad paid for by the group Protect Women and Children involving two initiatives about abortion laws on Tuesday's ballot.

The female athletes backed Initiative 434, which would amend the state constitution to prohibit abortions after the first trimester, with exceptions. Star softball player Jordy Bahl said on social media that the athletes were not paid.

A University of Montana spokesperson said two athletes initially agreed to take part in the NIL deal backing Tester. The school said one withdrew and the other declined to be interviewed.

For Meskers, deciding against the offer boiled down to Tester twice voting against proposals to bar federal funds from going to schools that allow transgender athletes to play women's sports, a prominent GOP campaign topic. Tester's campaign said the proposals were amendments to government spending packages, and he didn't want to play a role in derailing them as government shutdowns loomed.

"As a former public school teacher and school board member, Jon Tester believes these decisions should be made at the local level," a Tester spokesperson said. "He has never voted to allow men to compete against women."

Meskers said she believes using influence as college athletes is good and she is in favor of NIL. She just doesn't think the two should mix specifically for supporting candidates.

"I think especially as student athletes, we do have such a big voice and we do have a platform to use," she said. "So I think if you're encouraging people to do their civic duties and get up and go (vote), I think that's a great thing."

Bloomberg Philanthropies says investment in low-income students fell short 

FILE - Michael Bloomberg announces his organization, Bloomberg Philanthropies, will give $600 million to the endowments of the four historically Black medical schools at the National Medical Association convention, Aug. 6, 2024, in New York
FILE - Michael Bloomberg announces his organization, Bloomberg Philanthropies, will give $600 million to the endowments of the four historically Black medical schools at the National Medical Association convention, Aug. 6, 2024, in New York

More than $140 million from billionaire Michael Bloomberg’s charitable programs have been spent getting talented low-income students into top colleges, but an analysis of those programs found they fell short of goals.

The Wall Street Journal took a look at the programs, their objectives, and how they haven’t led to the results Bloomberg Philanthropies wanted to see. (September 2024)

Music students find community through 'international chat' program

FILE - A bicyclist watches for traffic before riding in Fredonia, NY, on Dec. 11, 2009.
FILE - A bicyclist watches for traffic before riding in Fredonia, NY, on Dec. 11, 2009.

State University of New York at Fredonia is trying a new method to help international music students feel at home.

A professor at the school hosts informal chats -- known as "international chat" -- several times a semester. The goal, the school says in an article, is to function "as a study group session for international students facing challenges that are unique to international students."

Read the full story here. (October 2024)

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