EDITORS: For more information on student loans, the Lumina Foundation for Education study or Heller, contact Mary Nehls-Frumkin at (734) 647-1638 or Lesley Harding at (248) 360-9415, or [email protected]

ANN ARBOR—Graduate students are paying the price for an education no matter the cost. A new study, led by University of Michigan education Prof. Donald E. Heller, finds the amount a student has to borrow for a loan has little to no bearing on whether that student enrolls in graduate school.

“Borrowing appears to have little impact on whether students attend graduate school,” said Heller. “Academic characteristics, in particular their degree expectations, choice of major and grade point average, are the most influential factors in predicting graduate school enrollment.”

The study, “Debts and Decisions: Student loans and their relationship to graduate school and career choices,” was funded by the Lumina Foundation for Education. The findings are based on data from the U.S. Department of Education‘s “Baccalaureate and Beyond” survey of approximately 11,000 students from the 1992-93 academic year.

Heller also finds that 50 percent of all graduates borrowed just to finance their undergraduate schooling. The average loan after completing a four-year degree is about $10,000. For those students who go on to borrow for their graduate degrees, the average loan balance increases to about $25,000—$57,000 for those who get a professional degree.

Other findings from the study include: African American, Hispanic and Native American students are more likely to borrow as undergraduates, along with students from lower-income families and those independent of their families or guardians. Students who attend proprietary (for-profit) schools and private nonprofit institutions are more likely to borrow than students who attend public institutions.

While this study is important, Heller warns that policy makers need to be cautious in applying the information to today’s student. “This report, which uses the most recent national-level data available from the federal government, examines a cohort of graduates who were in college before the large increase in loan limits was authorized under the 1992 amendments to the Higher Education Act. Undergraduate borrowing has continued to grow since these changes.”

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