Repayment of Federal Student Loans Over Time

In our previous blog posts, we reviewed a number of trends in the federal student loan debt data that are included in the US Department of Education’s College Scorecard data. The College Scorecard student loan debt data are different from other sources, as the cohorts included in the data are comprised of all undergraduates who disassociate from an institution during a given academic year. Whether they leave via graduating with a bachelor’s degree or stopping-out, these students’ debt levels are considered in the median debt calculations. Previously, we found that the median student loan amount is lowest at Hispanic-Serving Institutions (HSIs) and highest at Historically Black Colleges and Universities (HBCUs).  This blog post is the first of several that move beyond federal student loan amounts to explore how effective students in the College Scorecard cohorts are in repaying their student loans over time.

Percentage of Beginning Balance Owed Across Four Checkpoints: 1-, 5-, 10-, and 20-years

One of the data points included in the College Scorecard data that add value to our knowledge about student loan debt is related to students’ repayment of federal loans over time. These data report the overall average balance owed rate for each institution in the Scorecard data. The College Scorecard data shows balance owed rates that are calculated by aggregating all of the balances owed by members of the student cohort at each timepoint, and dividing that aggregation by the full amount of beginning balances borrowed at the time the students left the university.

The visualization below shows all of the institutions’ average percentage of beginning balance owed at each checkpoint. Texas public four-year universities are highlighted with their name abbreviation and color associated with university system membership. The horizontal line at 100% represents the point at which the average existing loan balance is equal to the original beginning balance owed. The trendline sloping from left-to-right shows the relationship between balance owed and time. 

  • Across all of the four-year public universities in the dataset, the average balance owed at each checkpoint was 97.6% in Year 1, 89.5% in Year 5, 64.9% in Year 10, and 40.6% in Year 20.
  • Practically all of the universities are clustered fairly closely at the Year 1 checkpoint, which makes sense. Texas A&M University students had the best (lowest) balance owed percentage in Texas at just over 91%, with UT Austin at 92%. Eighty percent (28 of the 35) of public universities in Texas had balance owed percentages above 100% in Year 1, meaning students owed more after 1 year away from school than they did when they left campus.
  • Balance owed percentages disperse a great deal beginning in Year 5 of the data, with the highest percentage in the dataset of 132.5% and the lowest at 23.3%. Texas A&M was the best Texas university at each of the four checkpoints, with 66% of the beginning balance owed in Year 5, 37.5% owed in Year 10, and 26.7% owed in Year 20. Five years after leaving campus, 63% of Texas universities show that students still owe more than 100% of their beginning loan balances.
  • In Year 10, with an overall average in the data at 65%, the range of average balance owed goes from 135% to 14%. More than 94% of Texas public universities in the dataset are below 100%, with two institutions remaining above 100%.
  • There are four Texas institutions below the Year 20 average of 40.6% (TAMU, Midwestern State University, UT Austin, and Texas A&M University-Texarkana).  The range in Year 20 remains fairly widespread, with the highest percentage still well-over 100% at 133%, while institutions exist that have 0% owed at the 20-year mark.

NOTE: Due to the volume of information in each visualization below, we recommend that you click the “Full Screen” button in the bottom-right corner to enhance viewing of the data.

So What?

This initial view of percentage of original balances owed highlights some of the concerns that were seen in average federal student loan debt data, as repayment of student loans may differ based on institutional type and demographic characteristics. The next few blog posts will explore the relationship between repayment of student loans and other characteristics to see what patterns are revealed in this rich set of data.