Title: How the Pandemic Could Affect the Rise in Student Debt
Source: The PEW Charitable Trusts
The PEW Charitable Trusts recently released a report that explores how student borrowing from the federal government during the COVID-19 pandemic has differed from borrowing during other recessions in the past 30 years.
How the Pandemic Could Affect the Rise in Student Debt looks at how factors such as tuition costs, enrollment numbers, and families’ ability to pay for postsecondary education have potentially influenced the recent trends in student borrowing and what these factors might indicate for the future of federal student debt in a post-pandemic society. According to the report, data shows that borrowing decreased by eight percent between the 2020 and 2021 academic years, with per-student borrowing declining by five percent.
Key findings include:
- The COVID-19 pandemic has had a different impact on higher education compared to previous economic crises, especially on tuition costs and borrowing from the federal government. Throughout the pandemic, overall student borrowing has declined, and tuition fees—which historically have increased during recessions—have remained level.
- Although college enrollment has declined at the undergraduate level across sectors, there has been an overall increase in graduate-level enrollment. This shift could potentially have led to increased borrowing, as borrowing tends to be high among graduate students.
- In fall 2020, the National Student Clearinghouse reported that for-profit institutions saw a 6.4 percent growth in undergraduate enrollment during the COVID-19 pandemic. However, enrollment in for-profit institutions declined in spring 2021, so it is unclear if the growth in fall 2020 was a trend or a singular occurrence.
- The authors suggest that the financial predicaments generated by COVID-19 could be “dissuading potential students from pursuing education,” or that those who do not have the financial resources are choosing not to enroll in college altogether.
- Modifications of student loan levels as a by-product of COVID-19 could have varying implications for students’ and borrowers’ future financial well-being. According to the authors, this will need further investigation.
To read the full report, click here.
—Brianna C.J. Clark