Striking Rise In Six-Figure Student Loan Debt

In "Who Graduates College with Six-Figure Student Loan Debt?," a recent student aid policy analysis, Mark Kantrowitz, publisher of and, takes a close look at students who graduate with more than $100,000 in debt. According to the report, one of his goals was to examine these borrowers to "identify the strengths and weaknesses of the student loan system."

The report provides a wealth of fascinating information and a series of policy recommendations the Student Loan Ranger largely agrees with.

Kantrowitz's policy recommendations include improving colleges' disclosure of college costs and financial aid; increased financial literacy for students, parents, and educators; monitoring and publishing by the Department of Education of college-specific information, including deferment and forbearance rates and average debt; increased state and federal investments in postsecondary education; and allowing the discharge of private and federal loans in bankruptcy. All these the Student Loan Rangers agrees with.

The Student Loan Ranger does question the impact of the report's suggestion to base aggregate and annual student loan limits on the average starting salaries for degrees and fields of study. While this may protect students, it also might foreclose lower- and middle-income students from certain fields.

The report stresses that the overall number of students graduating with six-figure student loan debt is low. However, potential law students should be aware that 36.2 percent of 2007-2008 law school graduates had six-figure debt, given the relatively poor legal job market and the difficulty assessing employment outcomes at individual law schools.

Some of the most interesting information presented shows a startling rise in the numbers of borrowers with six-figure loan debt at both the graduate and undergraduate levels.

According to the report, in 1995-1996, the total number of graduate students with combined undergraduate and graduate debt in six figures was only 3,300. By 1999-2000, it was 21,200; by 2003-2004 it was 51,100; and by 2007-2008 it was 70,800.

Undergraduates display what may be a similar—albeit later-starting and lower—trend. In 1999-2000 there were no undergraduates with six-figure debt; by 2003-2004 there were 2,400 and by 2007-2008 there were 7,800.

Kantrowitz does not provide an explanation for this rise, but the relationships between six-figure debt and the cost of attendance, type of institution, and institutional selectivity noted in the report may provide insight. According to the report, six-figure loan debt is correlated to all three of these. Undergraduates with six-figure debt were significantly more likely to attend expensive colleges; attend nonprofit colleges; and attend the most selective institutions.

These figures remind the Student Loan Ranger of the market-driven analysis made by Brian Tamanaha in his book, Failing Law Schools, that elite law schools "have raised their tuition to obscene levels because they can" and the lower-ranked schools have fallen in line, slightly behind.

Similarly, it is possible that that elite colleges have been raising their tuition in response to market demand, with lower-ranked institutions following suit.

Also potentially troubling is the slightly paradoxical fact that, according to the report, "[h]igh-income students are more likely to graduate with six-figure student loan debt." In fact, 32.2 percent of the undergraduates with six-figure loan debt have family incomes at or above $100,000. This suggests to the Student Loan Ranger that the undergraduates at elite nonprofit colleges are increasingly coming from high-income families.

Issues like these make the discussion we are already having as a society even more trenchant. Is a college degree worth the cost? Can we either curb the rising cost of college or provide enough aid (in Pell grants, for example) to ensure every member of society can afford a college education?
Or, as Kantrowitz warns, will "grants fail to keep pace with increases in college costs" resulting in lower- and middle-income "students graduat[ing] with thousands of dollars of additional debt … shift[ing] enrollment to lower-cost colleges" or being "priced out of a college education?"

Will college—and particularly the best colleges—be affordable for lower- and middle-class families or be increasingly populated by economic elites? These questions are not fully answered in "Who Graduates College with Six-Figure Student Loan Debt?," but the analysis does provide useful information to help inform this discussion.

Isaac Bowers is a senior program manager in the Communications and Outreach unit, responsible for Equal Justice Works' educational debt relief initiatives. An expert on educational debt relief, Bowers conducts monthly webinars for a wide range of audiences; advises employers, law schools, and professional organizations; and works with Congress and the Department of Education on federal legislation and regulations. Prior to joining Equal Justice Works, he was a fellow at Shute, Mihaly & Weinberger LLP in San Francisco. He received his J.D. from New York University School of Law.


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