Posted by: Gregory Linton | 01/16/2019

The Manhattan Institute releases report on college affordability

affordability coverLast week, the Manhattan Institute released an Issue Brief titled College Affordability Update: Value, Price, and Choice in U.S. Higher Education. The report uses data from the U.S. Department of Education’s National Postsecondary Student Aid Survey (NPSAS) to compare how college costs and borrowing have changed from 2011-12 to 2015-16. One of the surprising findings of the study is that students from the wealthiest households tend to take on the most debt because they choose to attend the priciest institutions. They make this decision because they assume that a degree from those institutions will result in higher long-term earnings.

Here are some of the interesting statistics provided in the study (I have rounded some of the numbers):

  • In 2015-16, the average net cost, including living expenses, for an entire bachelor’s degree was $85,000, an increase of $6,000 since 2011-12.
  • In 2015-16, the average net cost, including living expenses, for an entire bachelor’s degree from a private nonprofit college was $103,500, an increase of $2,000 since 2011-12 and $34,000 more than a public 4-year institution.
  • In 2015-16, the average net cost, including living expenses, for an entire bachelor’s degree from a highly selective private nonprofit institution was $143,750, an increase of $18,500 since 2011-12 and $57,000 more than less selective private nonprofit institutions.
  • Estimated average borrowing over the course of the degree increased from $25,090 in 2011-12 to $26,201 in 2015-16.
  • Students from families in the highest income quartile borrowed $10,500 more than students from the lowest income quartile because they tend to attend more expensive institutions.
  • Fewer students from higher-income families borrow at all compared to lower-income students, but when they do, they tend to borrow a lot more.
  • Students in 2015-16 reported lower levels of earnings than students in 2011-12.

Whenever you see figures for average student debt reported in articles, it is important to bear in mind that these figures relate only to those students who actually have debt, not to all students. In 2015-16, only 38.5 percent of undergraduates took out student loans, and only 4.3 percent had parents who took out Direct PLUS loans. The percentage increases to 58.0 percent for students at private nonprofit institutions and 9.2 percent for their parents.


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