A new report by the American Enterprise Institute has found that students from higher-income families take on the largest debts in comparison to those from the lowest-income families.
Titled “The surprising role of high-income families in student debt trends,” the report found that the biggest and most consistent changes in student borrowing patterns over the past two decades have occurred among students from higher-income families.
The number of students from high-income families borrowing for their college has doubled to 60 percent, while the share of low-income students earning bachelor’s degrees with debt has remained almost consistent.
The report noted that the higher-income students in the income group of $114,000 and more have borrowed the highest amount of $12,012 on average. In 1995-1996, the same income group borrowed $7,833.
Students in the income group of up to $22,000 borrowed $6,450 during 2015-16, while those in $22,000 to $114,000 income group borrowed between $6,596 and $8,801.
The high-income students who completed a bachelor’s degree in the academic year of 2015-16 borrowed $41,767 on average, which is higher than the borrowing pattern of all other low-income group students.
The report further negated the claims of similar reports implying that students from low and middle-income families are “more than twice as likely as other students to have student loans.”
“Many low and middle-class income students don’t receive Pell Grants and some students from the highest income groups do,” the report said.
“Using Pell Grant as a proxy thereby excludes virtually all low and middle-income students who don’t borrow from the very statistic meant to measure the share of low and middle-income students who borrow, dramatically inflating the share of those students who take the debt. It includes the higher-income students who are likely to borrow,” it added.
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