Study: Students Borrowing More

As Harvard College students and their families scraped together up to $17,000 to pay the fall installment of their termbill this week, a new government survey shows that the average student is borrowing more to attend college.

The National Postsecondary Student Aid Study, carried out by the National Center for Education Statistics, found that 55 percent of undergraduates received some type of financial aid—either in the form of grants, scholarships, loans or a work-study job.

The study found the average undergraduate had received about $2,000 more a year than they did five years ago to help attend college.

While in 1995-1996 the average student got $4,900 in federal loans or grants, that number had jumped to $6,265 in 1999-2000.

Among students receiving aid, 40 percent received grants alone and 13 percent received loans alone; 25 percent received a combination of loans and grants; 8 percent got loans, grants and work-study; and 13 percent received a different combination of aid.

Despite the recent efforts of many colleges to increase financial aid, the report noted that students at both public and private institutions were borrowing more to finance their education.

The average size of a federal student loan for undergraduates at a private university in the 1999-2000 school year was $5,161, compared with $4,967 five years earlier.

At the same time, federal student loans to state residents at public universities in 1999-00 averaged $4,743, up from $4,342 five years before, the study found.

However, Harvard’s own figures show that the recent changes in the University’s financial aid system have helped to reverse this trend of increased borrowing for students in Harvard College.

The average member of Harvard’s Class of 2001 graduated with a debt of $13,360, a drop of about 10 percent from the year before. The average debt for a student in the Class of 2000 was $15,000, according to Financial Aid Office Janet Irons.

“We’re projecting that those numbers will continue to drop as students borrow less in the coming years,” Irons said.

In March, Harvard increased financial aid grants by $2,000, reducing the amount students on aid contribute from loans or a job from $5,150 per year to $3,150.

The Real Cost

However, despite the high cost of tuition, another study out last week by the National Association of College and University Business Officers (NACUBO) showed that tuition does not come close to covering the actual cost of a college education.

NACUBO has been studying the tuition as part of its “Cost of College Project,” which hopes to define a formula for figuring out the true cost of a college education to the institution and includes everything from research and faculty salaries to electricity and heating costs.

Although final results are not due until next year, the organization released preliminary information during its annual conference last week.

NACUBO’s project, which studied the actual cost of an undergraduate education at more than 140 colleges and universities—including about 10 community colleges—found only two private colleges where tuition exceeded the cost of the education.

Private, four-year schools usually spent between 10,000 and 40,000 dollars to educate one student for a year.

At some schools, that number exceeded tuition by up to 20,000 dollars.

In the same vein, public universities usually spent 7,000 to 15,000 dollars per undergraduate, with tuition covering only about half the cost in some cases.

The NACUBO survey did not include room or board charges.

At Harvard, the Office of Financial Aid says that it costs upwards of $50,000 per year to educate an undergraduate. While tuition covers much of that figure, the shortfall is covered by funds from the endowment, donors, and federal grants.

And given colleges’ growing efforts in recent years to attract students by raising financial aid awards, the shortfall will likely increase in the future.

Princeton last year announced that all of its aid would be given in the form of grants, not loans or term-time jobs.

Harvard’s capital campaign raised 225 million dollars specifically to increase financial aid. Harvard’s financial aid budget for next year is close to $100 million, with $63 million of scholarship funds coming from the endowment.

—Staff writer Garrett M. Graff can be reached at ggraff@fas.harvard.edu.