Research by Public Agenda, Prepared for the Bill & Melinda Gates Foundation

FINDING No 3: High school graduates are less likely to say it’s a good idea to borrow money to go to college.

According to The Project on Student Debt, a nonprofit organization, the average college senior graduates owing roughly $24,000 in education loans. Our findings show that 89 percent of all young adults we interviewed agree that students have to borrow too much money to pay for college. As the results below suggest, high school graduates are somewhat more likely to worry about borrowing money for college, and other questions in the survey confirm the discomfort they feel. Fewer than 4 in 10 (37 percent) high school graduates strongly agree that even if someone has to take out a loan to go to college, it is worth it, compared with more than half (54 percent) of college graduates who strongly agree.

A young man in D.C. also had his doubts about whether getting a degree would really pay off once you were out working: “If you cannot get these loans deferred or get a forbearance. . . . it can seriously impact your future. I had to default on the loan. . . . I also find that a college graduate is not going to really make enough money coming out the gate to always pay those loans.”

Is a prestige diploma worth the cost?

Similarly, just 36 percent of high school graduates say that it is better to enroll in the best school that you can, even if you have to take out a loan to do it, as opposed to avoiding loans and attending a more affordable school. In contrast, more than half (52 percent) of college graduates say that borrowing money to go to a better school is worth it. One high school grad in a Fort Wayne focus group believed that friends who had borrowed money to go to a better school were now suffering because of it: “I’ve got friends with $350,000 [of debt] in their name. . . . And a lot of these are really good colleges. . . . They’re in debt up the wazoo because life is good. They’re married. They have a good family. . . . But all I hear from them is, ‘I still owe on my student loan’ . . . . I’m glad I don’t.”

The focus group discussions also suggest that decisions about borrowing are more pointed for high school grads.Many seem to come to the issue with fears and concerns that young people from more affluent families simply don’t have to face. After all, young people in this group are more likely to come from low-income families. About 1 in 5 recall serious financial struggles when they were growing up.

Perhaps as a consequence, many high school graduates see a starker trade-off in borrowing money to go to college: Yes, you have the degree, but you also have a big loan to pay off. Some focus group participants seemed to do an explicit calculation in their heads between how much money you could earn (and how quickly) set against the problem of paying the money back. A young man in Fort Wayne said this about borrowing more money to complete a four-year degree versus borrowing less money to complete a one-year technical degree: “You’re going to make more money [with a technical certificate] because [if you borrow money for a four-year degree] you’ve got a bigger loan you’ve got to pay back . . . before you can actually start bringing in or making more money. You’ve got a smaller loan [from a tech school].”

For many high school graduates, borrowing money to go to college has a potential upside, but it also has a serious potential downside—that of being in debt and burdened by college loan payments that you simply can’t afford. It’s an investment, but it carries risks. One analogy is that today borrowing money to go to college is like investing in the stock market: If you have the money and can afford the risk, the investment is sound. If you don’t have the money or have to borrow to invest, it’s another story entirely. Yes, it might work out, but if it doesn’t, you’ll be worse off than when you started.

“It doesn’t feel good to me”

The survey and focus groups included many young people who, it could be argued, live in the worst of both worlds—they borrowed money to go to college but left before getting a degree. They have to pay the money back but don’t get the benefit of having the credential in the workplace. In focus groups, their descriptions of their circumstances were often painful. It was clear that, in their own minds, having debt hanging over their heads severely limited their options. One young woman in D.C. described her thinking: “I’ve been out of school, and. . . . it doesn’t feel good to me to have to pay a loan back right now. If I do decide to go back to school, I want to be able to pay for school out-of-pocket, or [get a] grant, or something like that. I can no longer do another loan, so there’s no need for me to look for school until I’m able to afford it.”

Some were bitter about the decisions they had made to borrow money for school. In the survey, the vast majority (73 percent) of those who took out a loan but didn’t complete their degree programs believed that the loans were only a fair or poor investment. Among college graduates, only 23 percent saw their loans as a fair or poor investment.

College graduates are more likely than those students who left without a degree to have gotten help paying for college from virtually every source available. They are substantially more likely to have gotten scholarships (46 percent versus 13 percent of high school graduates) and federal, state, or college grants (59 percent versus 37 percent) or to have taken out loans (65 percent versus 31 percent). College graduates are also more likely to have used money from their families or their own personal savings (83 percent versus 69 percent), although majorities of both groups did this.

As a woman in our D.C. focus group who left her associate degree program said, “I started going to community college, but I was really paying it out of pocket. . . . Maybe if I asked [the college] probably would’ve [been] more helpful, but I never asked. I didn’t want their assistance very much, so that’s also a matter of my personal choice of not asking for their assistance too.”