Discussion Paper

The Changing Role of Community-College and For-Profit-College Borrowers in the Student Loan Market

Abstract: In the first post in this series, we characterized the rapid transformation of the higher education market over the 2000-2015 period, a transformation that was led by explosive growth of the for-profit sector of higher education. In the second post, we found that most of this growth was driven by nontraditional students entering these institutions. Given this growth and the marked change in student composition, it is important to understand what impact these patterns might have on student loan originations, student loan volume, and the borrower pool in the various sectors of higher education. While a causal analysis is beyond the scope of this post, we instead examine descriptive patterns in these critical postsecondary outcomes. Was the growth in for-profit enrollment associated with a higher incidence of student loans? Were for-profit students, the main contributors of this growth, more or less likely to take student loans, and were they more or less likely to originate larger student loans? How about community-college borrowers, especially since community college enrollment increased noticeably over the period? This post focuses on these questions.

Keywords: Student loans; for-profits; higher education; community colleges;

JEL Classification: J00; Q1;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2016-09-08

Number: 20160908