Authors: Elizabeth J. Akers and Matthew M. Chingos
Organization: Brown Center on Education Policy at the Brookings Institution
Summary: The researchers compared what students at a selective public university said in a survey they had paid for college and how much they had borrowed to what they actually had paid and borrowed. The researchers also used the National Postsecondary Student Aid Study to compare self-reported and actual borrowing on a national level.
- Fifty-two percent of survey respondents chose the correct $5,000 range representing what they had paid for college. A quarter chose an amount lower than what they had paid, 17 percent chose a higher amount, and 7 percent said they did not know.
- In the nationally representative data, about half of first-year students “seriously” underestimated how much they had borrowed and not even a third came up with an amount “within a reasonable margin of error.”
- In the nationally representative data, not all students even knew they had borrowed. Among those with federal loans, 28 percent reported they did not have federal loans and 14 percent that they did not have any loans.
Bottom Line: A good portion of students don’t realize what they’ve borrowed. That confusion, the authors write, is “almost certainly leading some students into decisions that they later come to regret.”