With higher costs, borrowing is more common among four-year students than two-year students. Over half of respondents at four-year institutions (52 percent) and 31 percent of respondents at two-year institutions reported borrowing student loans.

Across all survey respondents, about a third of Hispanic students (32 percent) reported that they had borrowed student loans compared to about half of Black students (49 percent). Thirty-eight percent of White students said they had borrowed student loans.

Many students are worried about their debt:

• Students are uncomfortable with the amount of student loan debt they have borrowed, even while they are still in school. Almost two-thirds of respondents who borrowed at four-year institutions (65 percent) and 61 percent at two-year institutions said they have more student loan debt than they expected at this point. (Q85)
• Many student borrowers are not confident they will be able to repay their loans. Three-quarters of respondents who borrowed at four-year institutions (75 percent) and 72 percent at two-year institutions were not at all confident or only somewhat confident they would be able to pay off the debt acquired while they were students. (Q86)
• Informed borrowing is a cornerstone of federal student loans. Students who borrow federal loans are required to complete student loan entrance counseling prior to accessing the funds. However, more than half of borrowers at two-year (53 percent) and four-year (54 percent) institutions reported not receiving, or not remembering receiving, this counseling. (Q87)
• More than two in five respondents at two-year institutions (42 percent) and at four-year institutions (41 percent) agreed or strongly agreed their total debt (such as credit cards, car loans, etc.) is overwhelming. (Q88)
• Many student loan borrowers are very worried about their debt, signaling potential repayment struggles in the future . An alarming 39 percent of two-year borrowers and 40 percent of four-year borrowers showed signs of regret when answering three questions about debt concerns:
  • Agreed or strongly agreed they have more student loan debt than they expected to, and
  • Agreed or strongly agreed the total amount of debt they have (all debt, not just student loans) is overwhelming, and
  • Were not at all confident or only somewhat confident they would be able to repay their student loans.

Sometimes, students use credit in risky ways, especially when finances are tight:

• Students are borrowing on credit cards with some frequency. Almost half of respondents at two-year and 44 percent of respondents at four-year institutions reported using a credit card (for any reason, not just to pay for college) in the past 12 months. (Q67)
• More than four in five two-year respondents and 73 percent of four-year respondents said they had used a credit card for something they did not have the money for at least once in the past year. (Q71)
• While most respondents who used a credit card in the past year reported paying their bill on time, many failed to pay their full balance, accruing interest at potentially high rates. More than three-quarters of respondents across two-year and four-year institutions agreed or strongly agreed that they always pay their credit card bill on time. However, only 43 percent at four-year institutions and 34 percent at two-year institutions agreed or strongly agreed that they fully pay off their credit card balance each month. (Q72-73)
• There were differences by race/ethnicity in credit card use. Black and Hispanic students were more likely than White students to say they had used a credit card for something they did not have the money for, and were less likely to say they always pay their credit card bill on time. (Q71-72)
• Compared to credit card use, it was much less common for students to borrow a pay day loan or an auto title loan in the past 12 months. (Q68-69)
• Across all survey respondents, four percent of White students and six percent of Hispanic students reported borrowing a pay day loan in the past year, compared to 11 percent of Black students. (Q68)
• While most respondents had not borrowed a pay day loan or auto title loan in the past year, those who did sometimes found themselves needing to borrow more than once. Among those borrowing an auto title loan, 16 percent across two-year and four-year institutions borrowed more than one over the last 12 months. (Q75)
• Pay day loans were used much more frequently than auto title loans. More than two-thirds of pay day loan borrowers at two-year institutions and more than half of them at four-year institutions borrowed a pay day loan more than once. (Q74)

When self-help, family support, and grant aid are insufficient, students often turn to borrowing to pay for their expenses while in college. Students reported signs of regret regarding their current debt levels, and their confidence in being able to repay their loans is alarmingly low. Most worrisome are the group of students who engaged in risky use of credit (i.e., students who resort to pay day and auto title loans, and to habitual interest payments on outstanding credit card debt). The next section looks at higher education financial decision-making through the framework of the Personal Finance Ecosystem. The four key factors discussed point to areas of concern for institutions and suggest opportunities for promoting personal financial development among students.