College Scorecard Repayment Rates by Completion Status

In January, the U.S. Department of Education updated the College Scorecard interface and released new data elements including dollar-based repayment rates. These new repayment rates shed light on the share of dollars on student loans being repaid over time for each college and program and are one way to gauge the extent to which borrowers are falling behind on their student loans. The dollar-based repayment rates indicate borrowers’ ability to reduce their outstanding balance one year, four years, five years, ten years, and twenty years after leaving college.

The New College Scorecard Data Underscores How Much Completion Matters.

Prior research has found that students who borrow the least are the most likely to default, often because they left college without a credential,[1] and these new data underscore those trends. Across all borrowers in the cohort, specifically examining known completers and non-completers, 40 percent of borrowers had left with a credential and borrowed an average of $19,450 in debt. However, the majority of borrowers (60%) did not complete any credential and were left with $10,700 in debt.[2]

Looking at repayment rates by institution type, stark distinctions in outcomes exist between completers and non-completers, as shown in the figure below. Non-completers fare worse than completers no matter the institution type. Across all borrowers, non-completers saw their balances grow by 6 percent over four years. Among borrowers who had attended for-profit colleges, non-completers saw their debt grow at double the pace of others, with balances growing 14 percent after four years.

In contrast, borrowers who completed their programs had paid down 6 percent of their debt after four years, with those who had attended public and nonprofit colleges seeing double-digit decreases in debt. Community college borrowers’ balances were unchanged after four years.[3] The biggest outliers were borrowers from for-profit colleges, from which even students who completed their programs saw their balances grow. In fact, borrowers who completed at for-profit colleges fared worse than non-completers at public and nonprofit colleges. This is particularly concerning given that 60 percent of students at for-profit colleges are most likely to take out federal loans (60% of students in 2015-16, compared to 13% at community colleges, 45% at public four-year colleges, and 55% at nonprofit colleges).[4]

Source: College Scorecard, institution-level data, accessed January 2020. The dollar-based repayment rate is calculated on the outstanding balance of a two-year pooled cohort of undergraduate borrowers who borrowed federal student loans and separated from college during award years 2013-2015.

Policies and Practices That Increase College Completion Can Improve Loan Repayment

Non-completers consistently fall behind on student loan payments, and borrowers at for-profits, regardless of completion status, experience some of the worst loan repayment outcomes. This goes to show that policies and practices that uplift college completion remain critical, as well as increasing access to need-based student aid and making loan repayment simple, manageable, and fair. Increasing college attainment offers tremendous promise for increasing social mobility, tackling poverty, and reducing racial and income inequality, on top of improving loan repayment outcomes. Read more about our policy proposal to spend $1 billion for scaling comprehensive student success initiatives, and ultimately doubling the number of first generation, low-income, Black, Indigenous, and Latino students who graduate from college.

It also speaks to the need to ensure colleges that routinely leave students with debts they cannot repay are required to improve. Read more about how strong gainful employment and borrower defense rules help to promote high-quality, affordable college opportunity.

Stay tuned for more in our next blog on default, delinquency, and other non-repayment outcomes from the new College Scorecard data on the loan statuses of borrowers by institution type and completion status.

[1] Susan Dynarski, “Why Students with Smallest Debts Have the Larger Problem,” The New York Times, April 31, 2015, https://bityl.co/5SHb.

[2] Borrowers with an unknown completion status were excluded from this analysis. For these borrowers, their loan payment was much lower than the repayment rates of completers.

[3] Caveats about completion status at community colleges may explain why the proportion of completers is smaller at community colleges. First, students who borrow, leave, and transferred to another school are counted as non-completers at the first college, if they left and transferred before completing any credential. Hence, some non-completers at community colleges are borrowers who transferred and eventually graduated at another college. Second, if students attend multiple colleges, they are only counted in repayment rates for the institutions at which they borrowed loans. This means students who transfer from community colleges will not be included in the repayment rates of community colleges if they do not borrow while attending those schools. These caveats may explain why repayment rates include few completers at community colleges, since many community college students eventually transfer to four-year colleges before graduating.

[4] Calculations by TICAS using data from the U.S. Department of Education’s National Postsecondary on Student Aid Study (NPSAS), a national survey of undergraduates attending college in 2015-16.