Board of Governors of the Federal Reserve System

Higher Education and Student Loans

The self-assessed value of higher education, while generally positive, depends on several aspects of an individual's educational and personal experience, including the type of institution attended, use of student loans, and age. In 2023, rates of education and types of institutions attended continued to vary by different demographic characteristics such as parental education, age, and race and ethnicity. Finally, following the restart of federal student loan payments in the fall of 2023, the share of student loan borrowers who were required to make payments rose compared with 2022, returning to pre-pandemic levels.

Educational Attainment

Most adults have enrolled in some education after high school, although rates vary across demographic groups. Seventy percent of adults had ever attended an educational program after high school, whereas just over half had received at least a certificate or technical degree, and 37 percent had received at least a bachelor's degree. Consistent with increasing rates of college attendance over time, the share of adults who had ever enrolled in an educational program after high school was higher for younger adults than for older adults (table 34).⁴⁵ The share with education beyond high school also varied substantially by race and ethnicity, with Hispanic adults being much less likely than others to have ever attended college while Asian adults were more likely than others to have attended college.

Table 34. Educational attainment (by age, race/ethnicity, and parental education)

The likelihood of obtaining a bachelor's degree or more was higher among those whose parents were college graduates. Among adults who have at least one parent with a bachelor's degree, 66 percent received at least a bachelor's degree themselves. In contrast, 25 percent of adults whose parents did not complete a bachelor's degree did not receive one themselves.

The type of institution attended also varied with parental education and race. Most adults who attended an educational program beyond high school went to public institutions (70 percent), while less than one-fourth attended private not-for-profit schools and 7 percent attended private for-profit schools. Although private for-profit schools comprised a relatively small share of the higher education attendance for students of a range of backgrounds, adults whose parents did not have a bachelor's degree were more likely to attend a private for-profit institution than those who had a parent with a bachelor's degree—9 percent versus 3 percent, respectively. Additionally, 11 percent of Black adults and 13 percent of Hispanic adults who pursued education beyond high school attended for-profit schools—much higher than the shares of White and Asian adults who pursued postsecondary education who attended for-profit schools (5 percent and 4 percent, respectively).

Overall Value of Higher Education

Consistent with higher rates of financial well-being among those who have more education, discussed in the "Overall Financial Well-Being" section of this report, more than one-half of adults who ever enrolled in an educational program beyond high school (and were not currently enrolled) said that the lifetime financial benefits of their higher education exceeded the financial costs.⁴⁶ Meanwhile, one in five said that the costs were higher. The rest saw the benefits as about the same as the costs. These self-assessments of the value of education have changed little in recent years.

The self-assessed value of higher education, while generally positive, depends on several aspects of a person's educational experience. In particular, those who completed their program and received at least an associate degree were far more likely to see net benefits than those who did not complete a degree. Among those who enrolled in education beyond high school but did not complete at least an associate degree, 28 percent said the benefits of their education exceeded the cost. This compares with 43 percent of those with an associate degree and 68 percent of those with at least a bachelor's degree.

The self-assessed value of higher education also increased with age. Among those who completed at least some college or a technical degree and were not currently enrolled, those who were age 45 and older had more positive assessments of the value of their education than those under age 45 who completed the same level of education (figure 30). These age differences may reflect that older adults have had a longer time to experience the benefit of their education than younger adults. This variation may also be driven by the rising costs of higher education and the increased use of student loans, which makes costs remain more salient into adulthood.⁴⁷

Reflecting that student loans may affect perceptions of higher education, 44 percent of those with student loans who completed at least an associate degree said the benefits of their education exceeded the costs. By comparison, 68 percent of adults with an associate degree or higher who had either completely paid off their student loans or never had debt said the benefits of their education exceeded the costs.

The type of institution attended was also associated with differences in how people viewed their education.⁴⁸ Among those with an associate degree or higher, 64 percent of those who attended public institutions saw their educational benefits as greater than their costs, as did 66 percent of those who attended private not-for-profit institutions. However, a far lower 38 percent of those who attended for-profit institutions felt their education's benefits were greater than its costs.

Look Back on Education Decisions

Another way to assess the value of education is to consider what people would have done differently if given the chance. Most people value the education they received, but with the benefit of hindsight and life experience, it was also common to think that different educational decisions could have been better.

Completing more education was the most common change individuals would have made regarding their education. Forty-five percent of adults who attended an educational program beyond high school and were not currently enrolled said that they would complete more education in hindsight. This includes 61 percent of those with less than a bachelor's degree. In contrast, just 10 percent of people who pursued education beyond high school said that they would have completed less education or not gone to college if they could make their education decisions again.

Additionally, reassessments of educational decisions varied by the type of institution attended. Thirty-nine percent of those who received a bachelor's degree from a for-profit institution said they would have attended a different school in hindsight, compared with 25 percent of those who received their bachelor's degree from a private not-for-profit institution and 19 percent who received their bachelor's degree from a public institution.⁴⁹ This gap by institution type is smaller than in recent years, but it remains the case that those with a degree from for-profit institutions are far more likely to say that they would have changed the school attended. This difference remains even after accounting for the level of education completed, the parents' level of education, and demographic characteristics of the student.

Among adults who attended an educational program beyond high school and were not currently enrolled in an educational program, the changes they said they would now make to their educational decisions were also related to the type of educational program they completed most recently. Those whose most recent educational program was engineering, computer and information sciences, or health reported the lowest rates of saying they would choose a different field for their undergraduate degree (figure 31).⁵⁰ The share who would change their field of study across educational programs is broadly consistent with patterns for how people see the relative costs and benefits of their education. For example, 73 percent of those who studied engineering said the benefits of education exceeded the costs—the highest of any field of study. Nevertheless, in every educational program people were more likely to say that the benefits exceeded costs than to say that costs exceeded benefits.

Incidence and Types of Education Debt

It is common to use debt to finance higher education. Thirty percent of all adults—representing more than 4 in 10 people who pursued education beyond high school—said they took out student loans for their education. This includes 18 percent of those who still owed money on outstanding loans ("student loan borrowers") and 24 percent who borrowed but fully repaid their education debts.

The share of adults who attended an educational program beyond high school and took out student loans for their education varied across age groups. Adults ages 30 to 44 were most likely to have taken out student loans for their education, while older adults were less likely to do so, consistent with the upward trend in educational borrowing over the past several decades (figure 32).⁵¹ Additionally, adults who completed higher levels of education were more likely to have taken out student loans than those who completed lower levels of education.

Most student loan borrowers with outstanding debt owed less than $25,000 on their loans.⁵² The median amount of education debt in 2023 among those with any outstanding debt for their own education was between $20,000 and $24,999. Twenty-eight percent of student loan borrowers had less than $10,000 in outstanding student debt. Student debt balances also varied across different demographic groups. Borrowers with higher levels of education were more likely to carry higher balances of student loan debt (figure 33). Black borrowers were more likely than White and Hispanic borrowers to carry higher balances on student loan debt.

The incidence of education debt varied by the type of institution attended. Among those who attended public institutions, 40 percent either previously held debt or currently had debt as of October 2023, compared with 57 percent of those who attended private not-for-profit schools and 63 percent who attended private for-profit institutions. In 2023, people with outstanding student loan debt who attended private not–for-profit schools were more likely to hold higher balances of student loan debt (median amount between $25,000 and $29,999) than those who went to either private for-profit or public schools (median amount of debt between $15,000 and $19,999).

Some people also took out student loans to assist family members with their education through either a co-signed loan with the student or a loan taken out independently. Although this was less common than borrowing for one's own education, 5 percent of all adults had student loans that paid for a child's or grandchild's education. Among those who had outstanding debt for a child's or grandchild's education, the median amount of debt was between $15,000 and $19,999.⁵³

Student Loan Payment Status

The pause on federal student loan payments that had been in place since early in the pandemic ended in 2023. As a result, interest charges on federal student loans resumed in September 2023, and payments were required as of October 2023, just before the 2023 survey was fielded.⁵⁴

With the restart of federal student loan payments, the share of student loan borrowers making payments returned to pre-pandemic levels. As of October 2023, 65 percent of borrowers with student loans for their own education reported that they were currently required to make monthly payments on their student loans. This is well above the 37 percent of borrowers who reported they were required to make payments in 2022 and is similar to the 66 percent of borrowers who reported owing monthly payments in 2019.⁵⁵ Additionally, in 2023, 16 percent of borrowers reported being behind on payments or in collections for one or more of their student loans, up slightly from the 15 percent in 2022 but still slightly below the 17 percent from 2019.

Similar to findings in previous years, borrowers with less education or lower income were more likely to be behind on their student loan payments. Twenty-two percent of borrowers with loans outstanding who completed an associate degree reported being behind, compared with 7 percent of borrowers with a bachelor's degree (table 35).⁵⁶ Similarly, nearly one-fourth of borrowers earning less than $25,000 were behind on student loan payments, while 7 percent of borrowers earning $100,000 or more were behind. In addition to these differences by income and education level, Hispanic and Black borrowers reported higher rates of being behind on student loan payments.

Table 35. Behind on student loan payments (by family income, education, and race/ethnicity)

Difficulties with student loan payments also varied by the type of institution attended. Twenty-seven percent of borrowers with outstanding student loans for their own education who attended for-profit institutions were behind on student loan payments, versus 13 percent of those who attended public institutions and 11 percent who attended private not-for-profit institutions.

Although it is common to focus only on those with outstanding debt, many people who borrowed for their education had repaid their loans completely. Excluding people who have paid off their debt could overstate difficulties with repayment. Indeed, the share of adults who were behind on their payments is much lower when accounting for all who ever borrowed, including those who had completely repaid that debt.

Among those who ever incurred debt for their education, 7 percent were behind on their payments at the time of the 2023 survey, and 36 percent had outstanding debt and were current on their payments. Fifty-seven percent had completely paid off their loans, up 7 percentage points from the prior survey. Nevertheless, the demographic and educational characteristics of those who were behind on payments remain similar when also incorporating those who have paid off their loans.

 

References

 45. Though college enrollment rates among recent high school completers peaked at about 70 percent in 2009 and have since stagnated or fallen, enrollment rates remain historically high, averaging more than two-thirds of recent high school completers from 2010–19 and more than 60 percent from 2020–22, compared with 45 percent in 1965 (see National Center for Educational Statistics, "Digest of Educational Statistics" at https://nces.ed.gov/programs/digest/d23/tables/dt23_302.20.asp). Return to text

 46. In the sections "Overall Value of Higher Education" and "Look Back on Education Decisions," the results on the benefits of education and changes to education reflect the answers of people who have ever enrolled in an educational program beyond high school and either completed a certificate, technical, associate, or higher degree program or were not enrolled at the time of the survey. Thus, those who were currently enrolled in college but did not have a degree are not included. Return to text

 47. From 1995 to 2015, net tuition, fees, room, and board rose 54 percent at public four-year institutions and 29 percent at private, nonprofit, four-year institutions in real terms. (Sandy Baum and Jennifer Ma, Trends in College Pricing 2014, (New York: The College Board, 2014), https://research.collegeboard.org/pdf/trends-college-pricing-2014-full-report.pdf). In the current school year, net tuition, housing, food, and fees at public and private nonprofit institutions are slightly lower in real terms than they were in the 2014–15 school year. (Jennifer Ma and Matea Pender, Trends in College Pricing and Student Aid 2023, (New York: The College Board, 2023), https://research.collegeboard.org/media/pdf/Trends Report 2023 Updated.pdf). Return to text

 48. Individuals do not self-report the type of institution in the survey. Instead, the institution type is assigned by matching the name and location of the college reported by the individual with data from the Center on Postsecondary Research at the Indiana University School of Education (https://cpr.indiana.edu/). For individuals who completed an associate or bachelor's degree, institution type is based on the school from which they received the degree. For other individuals, it is based on the last school attended. Return to text

 49. These results are similar if those who completed less than a bachelor's degree are included. Return to text

 50. Each category of educational programs may contain multiple fields of study, so it is possible that some respondents who said they would choose a different field of study in hindsight would not change their educational program. Additionally, respondents are asked to identify the educational program for their most recent degree, whereas the question about changing fields of study in hindsight asks respondents about undergraduate degrees. Because of this, these questions do not ask about the same degree program for people with more than a bachelor's degree. However, our findings do not change when people with more than a bachelor's degree are excluded: adults who studied humanities/arts, social/behavioral sciences, or life sciences remain the most likely to say they would change their field of study at 45, 45, and 50 percent respectively, while those who studied engineering remain the least likely to say this (28 percent). Return to text

 51. Student loan borrowing has declined in real terms since its peak in 2010–11 but remains substantially above the levels from the mid-1990s. (Jennifer Ma and Matea Pender, Trends in College Pricing and Student Aid 2023(New York: The College Board, 2023), https://research.collegeboard.org/media/pdf/Trends Report 2023 Updated.pdf). Return to text

 52. All amounts of student debt among adults with outstanding student loans for their own education are for those who reported the current amount they owed on these student loans. Return to text

 53. The median amount of student debt for adults with outstanding student loans for their child's or grandchild's education is among those who reported the current amount they owed on these student loans. Return to text

 54. The Coronavirus Aid, Relief, and Economic Security Act temporarily paused payments on federally held student loans beginning in March 2020, although borrowers with private student loans were still required to make payments during this time. This payment pause for federal student loan borrowers was extended multiple times and ended on September 1, 2023. (See U.S. Department of Education at https://studentaid.gov/announcements-events/covid-19.) As a part of the resumption of student loans payments, anyone who qualified for a payment pause was also automatically eligible for an "on-ramp transition period." While payments are still due and interest will still accrue during this period, accounts will not be considered delinquent, be reported to credit agencies, nor go into default until September 30, 2024. (See U.S. Department of Education at https://studentaid.gov/manage-loans/repayment/prepare-payments-restart.)  Return to text

 55. In the 2022 and 2023 surveys, the question about borrowing for one's own education asked only about student loans, whereas the 2019 survey included other forms of debt used to pay for education. Nonetheless, 95 percent of those who had outstanding debt for their own education in 2019 had student loans. Return to text

 56. Currently enrolled students are frequently not required to make payments, so they are less likely to fall behind. Among those with less than an associate degree who are not currently enrolled and owe outstanding student loans on their own education, a larger 38 percent of borrowers are behind. Return to text