2019 College Track Social Mobility Report 2019 College Track Social Mobility Report (web) - Page 10

COLLEGE TRACK FRESH GRADUATES EARN ENOUGH TO PAY BACK THEIR LOANS Graduates who work full-time are able to repay their loans, provided they did not borrow more than $30,000. While our proportion of borrowers is constant year-over-year, the average debt is higher. We anticipated this trend, and we started communicating the $30,000 threshold to our younger cohorts several years ago. Now, we proactively guide them to “Best Fit Colleges,” institutions where the average debt for our graduates is four times smaller than at what we call “expensive colleges” (small liberal arts colleges, Art schools, and HBCUs). We found that our 2017 graduates from such colleges borrowed over $45,000 to pay for their bachelor’s degrees compared to $10,000 for those who attended Best Fit Colleges (primarily flagship public institutions). 5 C O L L E G E T R A C K • P O S T- C O L L E G E O U TC O M E S At their first job, College Track graduates who borrowed >$30k can repay their loans within 10 years Step 1 Step 2 Step 3 College Track graduates take out average loans* Those with loans under $30k can repay with first job salaries Graduates from Best Fit Colleges have the lowest loans** 18% borrowed more and less likely to repay College Track *Compared to 50% of graduates in California and 48% in Louisiana; TICAS (2018), Student debt and the class of 2017. California VS 7% borrowed $25-30k and can likely repay Louisiana 75% borrowed less than $25k and can definitely repay Loans Upon Graduation*** Best Fit N=19 Public College N=8 Arts/HBCU N=6 ^We use the federal gainful employment rule for colleges; loan repayment should not exceed 8% of income. This is based on a small sample study of 16 borrowers with full-time jobs. **On par and likely better than graduates from similar backgrounds: NCES (2017) Repayment of Student Loans as of 2015 found an 8% default rate among all Bachelor’s degree holders and a 35% default rate among Pell grant recipients (regardless of whether they graduated), 3 times higher than non Pell grant recipients. So default rates for low-income graduates is likely higher than 18%. ***Includes non-borrowers College Track Page 10