On Campus

Student aversion to borrowing

Choice to go debt-free can limit enrollment options and hurt chances of graduation

The Washington-based Institute for Higher Education Policy and Excelencia in Education have released a new report that examines the characteristics of students who are less likely to borrow for post-secondary education.

According to the report, Student Aversion to Borrowing: Who Borrows and Who Doesn’t, students who are adverse to borrowing to finance their education include older, financially independent students who have delayed their enrollment, part-time students, and members of certain ethnic or immigrant groups.

While it might appear advantageous for these students not to borrow and accumulate student loan debt, there is a downside too. In some cases, aversion to borrowing may limit students’ post-secondary enrollment choices and/or negatively impact their chances of successfully completing a program.

The top 3 suggested reasons why students may choose not to borrow for education, even if they have substantial unmet financial need, are as follows:

  • Students may attend lower cost institutions or change their attendance pattern so that they face fewer expenses in a given semester and do not need to borrow.
  • Students may use other financial resources to pay college expenses and not have to borrow.
  • Students from certain racial/ethnic or immigrant groups may have a cultural or familial perspective on debt that encourages them not to borrow.