Wealthy students who borrow for college are taking on growing levels of debt and often attending the highest price institutions
NEW YORK, NY — The college affordability debate is often framed in terms of an unavoidable fate: students who desire a college education in the U.S. are saddled with unmanageable debt. The findings of a new Manhattan Institute report paint a more complicated picture, suggesting that efforts to assess college affordability must account for long-run returns, not simply short-run costs.
The report, College Affordability Update: Value, Price, and Choice in U.S. Higher Education, uses the most recent U.S. Department of Education data, finding that in 2015-16, students from the wealthiest households attended the priciest institutions and took on the most debt. While borrowing increased for students across all income categories since 2011-12, the biggest increase was seen among the most affluent students.
The authors, Beth Akers (Manhattan Institute), Kim Dancy (George Washington University), and Jason Delisle (American Enterprise Institute), suggest that many students are willing to absorb higher short-run costs in exchange for expected long-run returns like higher-paying jobs. It is therefore critical to incorporate long-run returns into any assessment of college affordability.
The report’s other findings include:
- In 2015-16, students seeking bachelor’s degrees faced an average net cost, including living expenses of about $85,000 for the entirety of their degrees—or about $6,000 more than in 2011-12.
- In 2015-16, students seeking associate’s degrees faced an average net cost for their degrees of about $22,000—essentially unchanged from 2011-12.
- In 2015-16, students from households in the highest income quartile (above $120,000) borrowed about $10,500 more than students from households in the lowest income quartile (below $30,000). In 2011-12, the borrowing gap was $7,500.
Click here to read the full report.