Public discourse raises the alarm about mounting student debt with a focus on the total amount of debt outstanding, but the amounts students are borrowing are actually decreasing. In fact, when adjusted for inflation, aggregate annual borrowing and average loans per student have declined every year since 2010–11, while the share of students graduating with any debt declined for certificate, associate degree, and bachelor’s degree graduates between 2012 and 2020. However, even with these gains, policymakers need to consider the individual students and the burdens they bear when designing public policy.

New data from the 2019–20 National Postsecondary Student Aid Study reveal how much undergraduate students are borrowing and how those patterns differ across certificate and degree programs, sectors, race and ethnicity, and students’ financial circumstances.

The path of student borrowing has changed markedly in recent years, but less so for certificate recipients

Although the dramatic increase in students graduating with high levels of debt between 2000 and 2012 did not continue in the following decade, this leveling off has not occurred equally for all groups of students. Debt levels have continued to increase for those earning certificates, those attending for-profit institutions, Black students, and to some extent, Asian students.

Defining high levels of debt is subjective. For my analysis, I use a threshold of $15,000 in 2020 dollars for certificate and associate degree recipients and $30,000 in 2020 dollars for bachelor’s degree recipients. In 2000, between 2 and 3 percent of graduates held these amounts of debt, whereas between 16 and 24 percent did 12 years later. (These debt levels include federal and nonfederal student loans, but not loans to parents).

The share with high debt did not increase measurably for associate and bachelor’s degree recipients between 2012 and 2020. But it did continue to grow (more slowly than before) for certificate recipients from all sectors, all racial and ethnic groups, and both Pell recipients and (more slowly) nonrecipients.

Although the shares of associate and bachelor’s degree recipients with high debt did not increase measurably, the share of bachelor’s degree recipients with very high debt (more than $50,000) did grow from 6 percent in 2012 to 10 percent in 2020.

Large debt burdens have increased for students at for-profit institutions

High levels of debt are most common in the for-profit sector, and debt burdens increased across the sector even as the share of students attending these institutions declined. In 2020, 33 percent of for-profit certificate recipients had high debt, an increase from 21 percent in 2012 and compared with 12 percent from public institutions in 2020. Among associate degree recipients, 75 percent of for-profit graduates had high debt, in 2020, an increase from 61 percent in 2012 and compared with just 13 percent at public institutions in 2020. 

Among bachelor’s degree recipients, very high levels of debt (above $50,000) continued to grow between 2010 and 2020, particularly among students from for-profit institutions. A similar pattern did not emerge for debt greater than $30,000, as more than half of for-profit graduates already borrowed this much in 2012.

The gap between the debt of Black graduates and others continues to grow

For certificate earners, high debt levels continued to grow for all racial and ethnic groups between 2012 and 2020. But high debt levels grew measurably only for Black associate degree recipients over these years, and only for Black and Asian bachelor’s degree recipients. Meanwhile, the gaps between Black students and both white students and Hispanic students who graduate with high levels of debt have continued to grow for all award levels.

Very high debt did grow for all groups of bachelor’s degree recipients—except Hispanic graduates—between 2012 and 2020. The share of Black four-year graduates with more than $50,000 in debt (17 percent) is now almost twice as high as the share of white graduates who borrow this much (9 percent).

Focus on students in need and problematic programs

These findings are in part cause for comfort and in part cause for deep concern. Focusing on overall student debt levels conceals the real challenges some undergraduate students face because of their economic and racial backgrounds and because of the types of institutions they attend and the types of credentials they earn. To help the students struggling most with debt, policymakers should consider targeting assistance toward these students and regulating programs that are not serving students well.