Introduction

California’s student debt picture is a story of haves and have-nots: those who have student loan debt face significant financial challenges that their college-educated peers without student debt avoid altogether. Having enabled the development of a relatively well-educated workforce, student debt now limits how much California borrowers can move up in the world using their education. Policymakers at the state and federal level are rightfully reckoning with the sustainability of this system, particularly regarding inequitable outcomes in loan repayment linked to factors such as race and ethnicity. To advance equity for student borrowers and improve their lives while in repayment, California must assess the drivers of student debt and the distinct and unequal ways it affects borrowers’ lives.

This research report builds on the work of the California Student Loan and Debt Service Review Workgroup, convened by the California Student Aid Commission under the charge of the Budget Act of 2020. The final report of this workgroup highlighted the disproportionate burden of student debt on Black and Latino/a students,1 women, low-income students, and students attending for-profit institutions, drawing insights from national research.2 The Century Foundation’s (TCF) research presented here further delves into these themes, leveraging a range of datasets to examine the distinct causes and unequal effects of student debt in California.

TCF’s research finds that California’s high cost of living and stratification of income by education combine to make student debt both inevitable and fraught with risk, particularly for the state’s lower-income families and communities of color seeking a livable wage and mobility into the middle class. In particular, uncapped, high-interest federal loans targeted at graduate students and parents tap into these fears that they or their children will be economically left behind. Californians who borrow these loans for an education at a for-profit college carry exceptionally high balances relative to other borrowers and the nation overall.

When other expenses are so costly, treading water in repayment is especially difficult for California’s families who lack the safety net of family wealth. According to TCF’s analysis, Black and Hispanic borrowers in California live in greater financial precarity than Black and Hispanic borrowers in the rest of the country, signaling the distinct financial toll of student debt in California. These trends would be far worse without the state’s grant aid programs and strong fiscal support for education.

According to TCF’s analysis, Black and Hispanic borrowers in California live in greater financial precarity than Black and Hispanic borrowers in the rest of the country, signaling the distinct financial toll of student debt in California.

As the United States experiences the highest inflation in a generation and sees resource inequality reach high-water marks, America’s future may increasingly look like California’s present. How the state manages its distinct student debt challenges may offer a roadmap for the nation overall.

A Deeper Dive into the Data

Audiences with an interest in the original data analysis in this report can learn more in a companion piece, “What the Data Tell Us about Student Debt in California.”3 In that document, readers can view extensive charts and tables that detail student loan borrowing and borrowers’ lives in California, toggle between different ways of cutting the data, and learn more about the data sources used for this report. The companion piece serves as both an appendix to this report and a standalone research document, offering readers even more opportunities to examine the themes explored here.

A Profile of California’s Student Debt: Where the State Succeeds, and Where It Falls Behind

California’s unique higher education system, combined with key aspects of the state economy, gives the state a distinct profile of student loan debt that differs from the nation overall. The available data paint a complicated picture of trends both good and bad, one that must be unpacked to be reckoned with through policy.

The Good News

California is a leader in terms of how few of its students need to incur debt to pay for tuition. Only 21 percent of California’s in-state undergraduates borrowed in 2015–16, compared to 37 percent of in-state undergraduates across the United States overall.4 With its longstanding community college tuition waiver, outstanding debt that originated at a California Community College totals only $4.2 billion,5 a small figure relative to the nearly three million students who have graduated from the system over the past decade.6

In addition, the state’s relatively low public university tuition and its financial aid programs—including the Cal Grant, the state’s marquee need-based grant—contribute to the lower share of students borrowing to pay for undergraduate education. Among the U.S. states, California’s adult populace features the fourth-lowest number of federal student loan borrowers per capita.7 (See Figure 1.)

Figure 1

The lower percentage of students who borrow is one reason why California has a reputation for affordable college.8 But this does not mean California is ahead in the other areas, as this report will explore. In many respects, the state measures up worse than most others.

The Bad News

While California is well-regarded for its affordable public higher education, the state is in a more precarious position than other states along a few key facets of the student debt crisis: higher average debt balances, the burden of debt on the state’s Black families, the growth of risky graduate debt, and the state’s reliance on parent-held debt that is so difficult for families to repay. Nowhere are these themes as pronounced as when we look at the state’s for-profit college sector.

Even though a smaller share of Californians are student loan borrowers compared to other states’ populations, California’s borrowers owe more on average than borrowers in other states, with a mean of $37,400.9 (See Figure 2.) Of the families of in-state undergraduates who borrowed in 2015–16, those in California averaged $9,800 per year, 15 percent more than those across the United States overall.10 While California is in the front of the pack when it comes to low borrowing rates, it is in the back-third for the average debt among those who have it.

Figure 2

For some borrowers, balances creep up as interest compounds. But another major force driving up California’s average is high borrowing amounts among those who take out loans, with graduate debt and parent debt being notable pain-points.

The typical annual graduate loan is larger in California than the nation overall. California’s in-state graduate students who borrow average $28,300 in loans per year compared to $22,400 in the United States overall, a 26 percent disparity.11 In the Grad PLUS program, a federal student loan program for graduate students, California’s average annual loan is 25 percent higher than the average across the rest of the United States; the gap shoots up to 43 percent higher among those borrowing to attend for-profit colleges.12 This is particularly troubling considering that the Grad PLUS program has an outsized footprint in California, comprising 24 percent of student loan dollars disbursed in the state in 2021–22, versus just 14 percent for the rest of the United States.13

Across these borrowing patterns, California sees a disproportionate share of Black students borrowing. While 21 percent of California’s in-state undergraduates borrowed in 2015–16, this rises to 28 percent among California’s Black in-state undergraduates.14 When we focus our analysis on undergraduates on the cusp of earning their bachelor’s degree (removing virtually all students at community colleges and other two-years), 62 percent overall had borrowed loans, but this rises to 84 percent among Black students.15 At the graduate level, 51 percent of in-state students in California borrowed in 2015–16, but 81 percent of those who identify as Black did.16

This high rate of graduate borrowing extends to Latino/a students, 62 percent of whom borrow compared to 51 percent of graduate students statewide.17

California also shows higher average annual loans in the Parent PLUS program, a federal student loan program for parents of undergraduates, compared to the rest of the country. Overall, the average Parent PLUS loan for a California college or university is 21 percent greater than for the rest of the nation’s institutions; this rises to 56 percent greater in the for-profit sector.18 The federal government designed these loans for middle-class families, but they are increasingly used by very low-income families with bleak repayment prospects—especially Black Parent PLUS families, of whom four in ten nationally are estimated to be too under-resourced to contribute to their child’s college costs.19

The following sections explore the equity implications of heavy borrowing by California’s families of color, both in college and into repayment, and consider the long-term concerns arising from PLUS debt in California.

How California Drives a National Equity Gap in Borrowers’ Financial Security

Racial disparities in the outcomes of student loan borrowing indicate whether education’s mission to level the playing field is realized, or whether noneducational factors such as wealth disparities corrupt that mission by way of college costs and student loan debt. In the following analysis, we see that unequal reliance on student loan debt by race may worsen financial inequality among California’s borrowers to an even greater degree than in the nation overall.

Table 1
CALIFORNIA’S DIVERSITY IS REFLECTED IN ITS COLLEGES AND UNIVERSITIES. 
Group Total enrollment at California’s colleges and universities, 2021 Share of enrollment at California’s colleges and universities, 2021 Share of adults aged 18–35 in California, 2021
Latino/a or Hispanic 645,800 39.2% 45.7%
White 487,900 29.6% 28.7%
Asian or Pacific Islander 297,000 18.1% 14.7%
Black or African American 123,500 7.5% 5.8%
Native American 6,500 0.4% 0.3%
Multiple groups 86,900 5.3% 5.0%
Sources: Author’s analysis of data from the Integrated Postsecondary Education Data System (IPEDS), reflecting total undergraduate and graduate enrollment in the 2020–21 academic year, and the American Community Survey via the U.S. Census Bureau, reflecting survey year 2021. The “Nonresident alien” and “Race unknown” groups in IPEDS’s enrollment reporting are excluded from these percentage calculations.

To examine the relationship between race and student loan borrowing in California, The Century Foundation examined survey data collected by the U.S. Department of Education and the U.S. Federal Reserve.20 Student-level data capture the borrowing patterns of borrowers while they are enrolled, and household-level data observe the financial ramifications of that borrowing later in life. Because the data sources in this section use surveys to draw information about samples from the larger population, findings should be treated as estimates.21

Data from these surveys show that Black students are more likely to borrow than students from other racial/ethnic groups, and that, relative to the rest of the country, California’s Black borrowers actually fare worse in repayment, despite the state’s aggregate wealth and its relatively affordable public education for undergraduates.

Latino/a borrowing follows the same patterns as Black borrowing along some variables, but not all. Statistics on California’s Asian populations tend to track with statistics on the state’s white population, although this is not to say their experiences with college costs are the same. Sample size constraints also limit how much we can glean from existing datasets. (More breakdowns by group are available in the companion report.)

The racial wealth gap between white families and families of color has an inescapable influence on who borrows and on families’ experiences in repayment. The fact that these nationwide concerns are prevalent in California is not shocking. But the fact that California is one of the worse states for equity between groups, despite its financial aid structures and relatively strong public subsidization of education, is cause to delve further, to determine how and why problems exist, and to consider remedies.

Patterns of Borrowing in College

At both the undergraduate and graduate level, Black students are the most likely to borrow for their education. California is not the only state where this trend holds, but the gap in borrowing between Black graduate students and white graduate students in California is especially high, raising concerns that graduate education in California could be pushing a disproportionate share of Black families into debt.

California’s Black undergraduates are the most likely in the state to borrow in any one year, with 28 percent taking loans in 2015–16, well over the statewide average of 21 percent for undergraduates.22 This rises to 31 percent for Black female undergraduates in California, mirroring rates at the intersection of race and gender in national figures.23

By the time in-state undergraduates are set to graduate, a high share of California’s Black students have accumulated student loan debt (84 percent), followed by Pacific Islander (80 percent), Latino/a (62 percent), white (62 percent), and Asian students (56 percent); this parallels national patterns.24 (See Figure 3.)

Figure 3

Average cumulative loans by graduation are highest for California’s Black ($33,100) and Pacific Islander ($30,600) undergraduates, compared to the state’s undergraduates overall ($25,400).25 In other words, by graduation, California’s Black undergraduates not only are the most likely to have borrowed, but also on average have borrowed larger amounts.

Moving from the undergraduate level to graduate education, California ceases to be a leader in keeping borrowing low and instead trails other states. Black in-state graduate students in California appear to borrow more often (81 percent) than Black in-state students nationwide (65 percent) and have higher average annual loans ($26,500) than nationwide ($20,600).26 California’s Latino/a graduate students borrow at a rate slightly above 60 percent, matching nationwide numbers.27 (See Figure 4.)

Figure 4

Government-funded grant aid programs, such as the federal Pell Grant and the state-funded Cal Grant, predominantly focus on undergraduate education. Even though California has a strong infrastructure of undergraduate financial aid, we see that national gaps in undergraduate borrowing based on race persist in the state. And equity gaps in California appear larger at the graduate level, where students are more often left to financially fend for themselves without government-funded support. It is possible that undergraduate grant aid programs such as the Cal Grant help prevent gaps by race from growing much greater at the undergraduate level. Unfortunately, the evidence comes from sky-high borrowing among California’s Black graduate students.

Life in Student Loan Repayment

TCF’s analysis of data from surveys of households illustrates that, compared to California’s white families, student loan debt is more prevalent and more pernicious for California’s Black families, and to a lesser but still significant extent, California’s Hispanic families as well.28 By key measures, the experience of Black and Hispanic borrowers in repayment appears worse in California than in the rest of the nation.

A quarter of Black households in California and the rest of the United States alike report having education debt (26 percent), more than double the share for white California respondents (10 percent).29 Many Black families in California and the United States alike owe six-digit debts: an estimated one in seven Black borrowers in California owes more than $100,000, the highest estimated share of any group in California.30

Figure 5

Hispanic families in California have a different profile of student debt than Black families, with important nuance that raises its own set of concerns.

  • Hispanic households with student debt tend to have smaller balances than other groups in California, mirrored in the nation overall—though this does not necessarily mean repayment is easy for these families.31
  • The majority of Hispanic borrowers in California do not have a college degree, versus one-quarter of white borrowers in the state.32 This could be attributed to greater shares of Hispanic borrowers leaving college before they earn a degree, as well as higher shares of parent borrowers holding debt for a child’s education.33
  • Around 70 percent of Hispanic households in California with student debt earn less than $75,000, well above the 47 percent share for California’s white households with student loan debt.34 By comparison, Hispanic households with student loans outside California appear to earn less, but as we will see, somewhat higher incomes do not always counteract the high costs of living that make repayment challenging.

In other words, Hispanic families with debt face as many hurdles to repayment as other families, albeit for lower amounts of debt on average.

Racial disparities in family resources, such as intergenerational wealth, create racial disparities in repayment for American families. California’s families are no exception: compared to white borrowers (13 percent), estimates suggest Black (27 percent) and Hispanic borrowers (33 percent) in California are more than twice as likely to be behind on payments or in default, mirroring national gaps.35

One of the foremost signs of financial security is homeownership, and survey data suggest Black borrowers in California are distinctly struggling in this respect, with just 22 percent owning their own home.36 By comparison, 43 percent of Black borrowers in the rest of the United States own their home, and for no other group of borrowers is living in California associated with such a large decrease in the likelihood of owning one’s own home. (See Figure 6.)

Figure 6

The state’s high cost of living makes it all the more difficult for a young person out of college without significant family resources to accumulate new assets such as a home—especially if they have student loan debt.37 In national survey research, the Education Trust found that more than four in ten Black student loan borrowers put off purchasing a home due to their student loan debt, including six in ten with a graduate degree.38

Racial disparities in household savings and investments are greater among California student loan borrowers than among borrowers in the rest of the United States, confirming again the struggle to build financial independence for the state’s borrowers of color, despite the benefit of a college education. In California, 78 percent of Black households with student loans and 74 percent of Hispanic households with student loans have under $50,000 in savings and investments, compared to 57 percent of white households with student loans.39

The survey data confirm that these budget-sheet concerns translate to challenging lived realities. An estimated 9 percent of Black student loan borrowers in California report living comfortably, compared to 33 percent of white student loan borrowers in California and an estimated 18 percent of Black student loan borrowers outside California.40 (See Figure 7.)

Figure 7

Having fewer assets and disposable resources determines whether someone can pay their student loan bills and get out from under the debt, as well as other monthly bills. In California, student loan borrowers are much more likely (30 percent) to say that they cannot fully pay all their monthly bills than the state’s non-borrowers (18 percent). A startlingly high 38 percent of Black and Hispanic California borrowers say they cannot pay all their bills in full this month, over 22 percent of white California borrowers.41

The role of cost of living should not be understated in this discussion. The U.S. Census Bureau’s estimate of California’s poverty rate is 11.0 percent when using the national poverty line, but after accounting for state cost of living, California’s poverty rate jumps to 13.2 percent: this is easily the largest difference among the states.42 Under the supplemental poverty measure, California has the second-highest state poverty rate in the country, behind only Washington, D.C.43 When the resources needed just to survive are high, those with the lowest incomes are the most severely impacted. A student loan borrower in California who does not find a well-paying job is more likely than in other states to struggle paying down their debt, making them less able to get out from under the debt and achieve homeownership, financial comfort, the accumulation of savings for retirement and emergencies, and more.

California is likely, then, an extreme case of the financial difficulties we already know Black borrowers face nationwide, and it is in some respects an outlier case for Hispanic borrowers as well.44 The findings outlined above show that the racial wealth gap is closely entangled with student debt and cost of living, churning California’s Black and Hispanic borrowers in a maelstrom of financial challenges.

Student Debt Begets More Debt: Student Loans and Credit Cards in California

The survey data uncover a below-the-radar concern for student loan borrowers that may be especially potent in California: the intersection of student debt and credit card debt.

Not all debt for education takes the form of a student loan. Home-owning families can also use a home equity line of credit, and virtually anyone can put education expenses on a credit card. Of these three major options—student loans, home equity, and credit cards—the typical interest rates on credit cards are by far the highest, currently around 20 percent.45 According to the California Student Aid Commission’s research, 61 percent of California students who use a credit card carry a balance month to month, with an average carryover amount of $4,306.46 The average monthly credit card debt was found to be highest for Black students, students over age 25, students with dependents, and students who report having no consistent place to sleep.47

Once interest snowballs, it can prove very difficult for families to clear their credit card debt, especially if they are early in their careers. Credit card debt contributes to the education debt of one-quarter of California households who hold it, but is a higher percentage for Black borrowers (an estimated 40 percent) and Hispanic borrowers (an estimated 27 percent).48 (See Figure 8.) The Black–white gap appears larger among borrowers in California than borrowers in the rest of the United States.49

Figure 8

Student loan borrowers can also hold high-interest credit card debt for expenses that were unrelated to their education, but having student loans may make the credit card debt harder to pay off. California student loan borrowers significantly exceed California’s nonborrowers in the share who hold unpaid credit card debt: 62 percent among Californians with student loans and 40 percent among Californians without it.50 Black and Hispanic student loan borrowers in California have the highest rates of holding unpaid credit card debt, at 80 percent and 70 percent respectively, versus 55 percent of white borrowers in California.51

Correspondingly, 80 percent of Black borrowers and 73 percent of Hispanic borrowers in California report carrying an unpaid credit card balance “at least some of the time,” compared to 57 percent of white borrowers in California.52 In fact, 62 percent of Black borrowers in California report carrying an unpaid balance “most or all of the time,” signifying the steep challenge of getting out from under high-interest debt. These rates are high for Black households nationwide, but they seem to be magnified in California, and especially for Black student loan borrowers.53

For many student loan borrowers in California, the best relief they could receive may not necessarily be relief from their student loans. The best relief for them may be relief from credit card debt. This phenomenon is not exclusive to California, but it seems to be especially pronounced in the state.

Concerns such as high credit card carryover balances prevent borrowers from accessing more liquidity, such as a mortgage. When asked where they think their credit scores fall, four in ten of California’s Black student loan borrowers reported they believe their credit scores to be “poor” or “very poor,” versus one in ten among California’s white student loan borrowers.54

California is not the only state where student loan borrowers struggle with credit card debt, but it appears to have one of the most severe gaps between Black and white borrowers, raising concerns about what borrowing is putting Black Californians on this path.

How Uncapped Federal Loans Impede California’s Affordability Efforts

As discussed previously, fewer undergraduate students in California borrow, but the state has higher-than-average loan balances among those who do borrow. How is this the case, when most undergraduate federal student loans are capped at several thousand dollars, and so much of the state’s public education is well-subsidized by state funding and grants? A category of loans called “PLUS loans,” combined with the high price of private education, helps explain.

Parent PLUS loans and Grad PLUS loans are capped at the cost of attendance, with no regulatory limit on what the college can charge for tuition. These two programs also feature the highest interest rates of federal student loans being originated today, currently 7.5 percent.55 Through Parent PLUS and Grad PLUS, a borrower can—in the span of mere minutes—sign away their financial futures by borrowing tens of thousands of dollars.

Through Parent PLUS and Grad PLUS, a borrower can—in the span of mere minutes—sign away their financial futures by borrowing tens of thousands of dollars.

Figure 9

Parent PLUS Loans

A federal student loan program for families with dependent undergraduates, Parent PLUS loans fill the gap between college costs and what parents can pay with their liquid resources—typically, after the child has already taken out their own loans. Though Congress designed the program in 1980 with middle-class families in mind, the program is now used across the income spectrum, including by many low-income families who are likely to struggle in repayment.

Prior TCF research has found that more than 40 percent of Black Parent PLUS families have Expected Family Contributions of $0, placing them among the lowest-resourced families as assessed by the Department of Education.56 Families attending colleges with the greatest Black shares of enrollment make much slower progress on Parent PLUS repayment than families attending colleges with the greatest white shares of enrollment, indicating how the racial wealth gap can profoundly shape how parents are and are not able to repay their loans.57 While the state-level data do not have sufficient samples to discern differences by race among Parent PLUS borrowers in California, these equity concerns extend wherever Parent PLUS is prominent.

Families attending California colleges rely on Parent PLUS to finance undergraduate education more than the families attending other states’ colleges. As a share of undergraduate loan dollars disbursed in 2021–22, Parent PLUS is slightly greater in California (28 percent) than in other states (24 percent).58 An estimated 8 percent of households in California hold parent debt for college costs, rising to an estimated 11 percent for Hispanic households.59

Outstanding Parent PLUS debt from California institutions totals $7.9 billion, split between public ($3.1 billion), private nonprofit ($3.3 billion), and for-profit colleges ($1.6 billion).60 Some California institutions show extreme reliance on Parent PLUS: at Columbia College Hollywood, the families of more than 45 percent of undergraduates borrow Parent PLUS, with a median debt of $30,000.61

California’s Parent PLUS borrowers largely match Parent PLUS borrowers in the rest of the United States when it comes to their progress at repaying their loans, although this may still be a slower pace than many would expect. After ten years, California’s Parent PLUS borrowers owe 55 percent of their balance, and after twenty years, 36 percent of their balance remains.62

But average Parent PLUS loan amounts in California are high, especially at for-profit colleges. The average annual Parent PLUS loan in California ($21,900) in 2021–22 was higher than the average in the rest of the United States ($18,000), for a 21 percent disparity.63 In the private nonprofit sector, where the average Parent PLUS loan in California is $26,300, the disparity rises to 26 percent; in the for-profit sector, where the average Parent PLUS loan in California is $22,800, the disparity rises sharply to 56 percent.64

Table 2
THE PRIVATE FOR-PROFIT SECTOR IN CALIFORNIA RELIES HEAVILY ON PARENT PLUS LOANS
Institution control Average annual Parent PLUS loan in California Average annual Parent PLUS loan in the rest of the United States Percent difference
Public $18,900 $16,300 16%
Private nonprofit $26,300 $21,000 26%
Private for-profit $22,800 $14,600 56%
Overall $21,900 $18,000 21%

Source: Author’s analysis of data from the Federal Student Aid Data Center, reflecting the 2021–22 award year.

In the case of public and private nonprofit education, California’s families borrow higher amounts but seem to make up for it with repayment patterns that bring them closer to the national mean.65 (See Figure 10.) Less so for Parent PLUS loans borrowed for for-profit education; among families that borrowed Parent PLUS for a for-profit college, the average loan balance was 45 percent higher in California than the rest of the United States among families that had been in repayment for one year, and 56 percent for families that had been in repayment for five years.66

Figure 10

One underlying factor is that for-profit colleges frequently target low-income families who may be less capable of repaying their loans.67 But also, the relatively low returns on investment for a for-profit education mean that the students are less capable of helping their parents make progress in repayment.

It is notable and surprising that California is a standout case regarding high debt burdens for attending for-profits, given the more affordable options available to California’s families through its state financial aid and community college tuition waivers. These patterns also show how borrowing to attend for-profits can negatively impact the parents of the students that attend them, not just the students who enroll.

Graduate Loans

A graduate-level degree, such as a master’s or doctoral degree, appeals to many people seeking to move ahead in their career. More advanced skills in the workforce benefit society, but policymakers must grapple with the long-term economic consequences of that debt for families as well as the disparate impacts by race and class background.

Graduate loans include Stafford graduate loans and Grad PLUS.68 Grad PLUS loans mirror Parent PLUS loans in that they have no borrowing limits other than the cost of education, and their interest rates are higher (7.5 percent) than for undergraduate loans made directly to students (5.0 percent).69

Compared to the nation overall, Grad PLUS contributes a disproportionately large portion of California’s annual borrowing. Grad PLUS takes up 24 percent of the annual dollar-total of federal student loan disbursements in California, compared to 14 percent across the rest of the nation.70 Only Washington, D.C. sees Grad PLUS take up a higher share of annual loan disbursements. Stafford graduate loans comprise roughly the same share in California as in the United States overall, at 32 percent.

By total loan amount, graduate students comprise the majority of annual borrowing in California, placing California among one of just three states (plus Puerto Rico and Washington, D.C.) where graduate loan programs contribute more than half of all loan dollars disbursed annually.71

Within California’s graduate debt, concerning trends emerge. Among for-profit colleges, the average annual Grad PLUS loan in California is $30,600, which is 43 percent more than the average among for-profits in the rest of the United States.72 Among private nonprofit colleges, annual Grad PLUS loans are higher, averaging $33,200 per year in California, but the gap between California and the rest of the United States is much smaller (11 percent). Only in the for-profit sector do Stafford graduate loans in California exceed those in the rest of the United States by a meaningful margin, at 27 percent.

Table 3
CALIFORNIA’S COLLEGES CREATE GRAD PLUS LOAN BURDENS BEYOND THE AVERAGE FOR THE REST OF THE UNITED STATES, PARTICULARLY FOR-PROFIT COLLEGES
Institution control Average annual Grad PLUS loan in California Average annual Grad PLUS loan in the rest of the United States Percent difference
Public $25,100 $18,800 34%
Private nonprofit $33,200 $30,000 11%
Private for-profit $30,600 $21,400 43%
Overall $31,500 $25,200 25%
Source: author’s analysis of data from the Federal Student Aid Data Center, reflecting the 2021–22 award year.

In other words, California has a “for-profit graduate loan” problem. A few individual institutions comprise very large shares of graduate debt from for-profit colleges, such as the University of St. Augustine for Health Sciences, West Coast University, and Alliant International University.73

Californians with graduate loans from public and private nonprofit colleges manage relatively well in repayment, but borrowers with graduate loans from for-profit colleges can struggle for years. For the cohort of borrowers who have been in repayment for five years on a graduate loan from a for-profit college, California borrowers’ average loan balance is $81,600, which is more than double the average for the for-profit cohort in the rest of the United States.74 This percentage difference holds true for the cohort that has been in repayment for twenty years. (See Figure 11.)

For the cohort of borrowers who have been in repayment for five years on a graduate loan from a for-profit college, California borrowers’ average loan balance is $81,600, which is more than double the average for the for-profit cohort in the rest of the United States.

Figure 11

Outstanding Grad PLUS debt from California institutions totals $17.2 billion, of which $15.3 billion comes from private institutions, mostly the private nonprofit sector.75 The California colleges with the highest average outstanding Grad PLUS balances are largely private nonprofit law or medical schools.76

For those who already carry student loans from undergraduate education, graduate education ostensibly offers a brighter future—both in terms of loan deferment and long-term wage gains that will help with repayment.77 Graduate debt is risky in and of itself, and it can also enlarge inequities in borrowing carried forward from the undergraduate level. For a California State University (CSU) or University of California (UC) graduate education, repayment data suggest that a bet on these schools seems to typically pay off.78 But in private education, and at for-profit colleges in particular, a graduate borrower can find themselves with six-figure debt and a career that is short of what they expected.

California’s High Stratification of Income by Degree Attainment May Spur Heavy Borrowing

Between Parent PLUS and Grad PLUS loans, families in California can take out large amounts of debt that they may struggle to repay, especially when institutions do not provide wise counsel. PLUS loans are perhaps the worst thing to dangle in front of a student or family who will do anything for advancement through education, be it a parent who simply wants the best opportunities for their child or a working adult who sees a master’s program as the way out of a career rut. In a state with significant inequality79 and high cost of living,80 it makes sense that Californians would find PLUS loans especially appealing.

Data on attainment and income confirm that the state economy puts a premium on postsecondary education, reflecting an economy highly stratified based on workers’ education levels:

  • Among adults in the California workforce, the average worker whose highest credential is a high school diploma earns just $31,200. The average income rises to $72,500 for California’s workers whose highest credential is a bachelor’s degree.81 That 132 percent jump in income for California’s workers is the largest out of the fifty states.82
  • This trend follows through to the completion of a graduate degree. The average California worker with a graduate degree earns $108,500, representing a 50 percent jump above the average income for bachelor’s degree holders.83 The size of that increase ranks tenth among all states.84
  • Gaps in income by education are widening: analysis from the Public Policy Institute of California finds that the inflation-adjusted wages of households with a four-year degree have risen 34 percent since 1980, alongside flat or negative changes to income for families with lower education levels.85

An economy marked by such inequality can make a person feel like moving up the ladder is worth any cost. Enter PLUS loans, which will indeed cover “any cost” if the borrower lets them.

Unfortunately, not all who pursue a degree ultimately obtain high incomes, and they may struggle in repayment.

Unfortunately, not all who pursue a degree ultimately obtain high incomes, and they may struggle in repayment. Grad PLUS loans are eligible for income-driven repayment (IDR), the federal student loan repayment plan that is most amenable to borrowers with low incomes. Getting more California borrowers on IDR plans is a state priority outlined in the CSAC Student Loan and Debt Service Review Workgroup’s final report, and Grad PLUS borrowers in particular would benefit from IDR. However, Parent PLUS is not eligible for IDR, making these loans especially dangerous for parents without strong financial resources. Parent PLUS loans pose an especially thorny public policy issue, given that state lawmakers cannot turn to the strategy of enrolling more parent-borrowers on IDR.

Where the Data Fall Short—and Where the State Can Step In

This study finds California is driving some of the biggest disparities in financial security between Black student borrowers and white student borrowers nationwide. Given the dominance of the racial wealth gap and California’s high cost of living, small amounts of debt can spiral a person into financial difficulties if they lack the safety net of family wealth.

Nothing in this report should be read as wholesale criticism of California’s state financial aid programs, and these findings underscore how vital programs such as the Cal Grant are. This report has pointed out how some borrowers slip through the cracks and find themselves with unmanageable debt. If those cracks were larger, the situation would be even more dire.

The preceding analysis draws from research into the handful of major datasets that allow for state-level analysis on California and national comparisons. The companion report, “What the Data Tell Us About Student Debt in California,” attempts to provide the most complete examination of student loan debt in one particular state to date. And yet, much remains unclear.

The state legislature can expand on this report’s findings by initiating investigations to fill critical knowledge gaps where the reach of existing data sources ends.

Commission Research on Student Loan Borrowers’ Credit Card Debt

The analysis in this report found that credit card debt contributes to the loans of four in ten Black borrowers with any education debt in California, above the national average, and almost three in ten for Hispanic borrowers. More than six in ten Black student loan borrowers in California report carrying an unpaid balance “most or all of the time,” well above comparison groups.

The intersection of credit card debt and student loan debt has been examined in the research literature to only a limited extent, and not with a specific focus on California, where this intersection seems especially concerning.86 Accessing data from consumer credit reporting agencies is beyond the scope of this project, but California can commission a study into credit card borrowing patterns among the state’s college students and among its student loan borrowers, building on what CSAC’s SEARS research has already found.87

College students with no savings may borrow credit card debt to cover an emergency expense, such as a flat tire or a medical copay. Unfortunately, those balances can roll over and snowball, especially during college and just after, when early-career students’ incomes are still meager. Perhaps the best way to eliminate unmanageable credit card debt that gets racked up in college is to make sure it is not needed in the first place. A rising number of colleges provide students with emergency aid to cover unpredictable expenses, and in 2020 and 2021, Congress sent colleges $75 billion in pandemic aid with about half earmarked for direct emergency grants to students.88 The California legislature can appropriate funds to ensure colleges have sufficient emergency funds to make sure that, in a moment of crisis, the student can afford to stay enrolled without having to incur high-interest debt.

Increase Monitoring of PLUS Loan Borrowing in California

While reducing undergraduates’ loan borrowing is a central aim of many states’ financial aid programs, including California’s, lawmakers cannot ignore the risks to families’ financial security posed by uncapped loans to parents and graduate students. The state can focus its attention on Grad PLUS and Parent PLUS borrowing, especially at the state’s private colleges. At fifteen California colleges, parent borrowers still owe more than two-thirds of their Parent PLUS balance ten years into repayment; at a dozen California graduate schools, the typical graduate borrower owes more than their original balance ten years into repayment.89 All but one of these institutions are private.90

At fifteen California colleges, parent borrowers still owe more than two-thirds of their Parent PLUS balance ten years into repayment; at a dozen California graduate schools, the typical graduate borrower owes more than their original balance ten years into repayment.

Through a legislative directive to CSAC or the California Bureau of Private and Post-secondary Education (BPPE), the state should examine and monitor the practices of institutions that burden families with the greatest amounts of PLUS debt. These practices may include how PLUS loans are communicated in recruitment and on financial aid award letters, and whether private institutions charge excessive tuition prices while encouraging undergraduates to pass the cost burden onto their parents.91 The Cal Grant program already includes guardrails that withhold eligibility from poorly performing institutions, and the state could add a restriction whereby institutions may not have more than half of its Cal Grant recipients borrowing Parent PLUS, for example.92

Continue Statewide Pursuit of Debt-Free College

TCF’s analysis of survey data on household finances and student debt in California found concerning trends in Black and Hispanic borrowers’ ability to build assets and stay afloat, as they juggle student debt and living costs.

In California, Black and Hispanic borrowers report being behind on student loan payments more often than do white borrowers, are more likely to be unable to pay their monthly bills, and are more likely to have less than $50,000 in savings. Black borrowers in California are less likely to own their own home than Black borrowers in the rest of the United States, and they are less likely to report living comfortably than white borrowers in California. These are not an indication of borrowers’ failures to capitalize on their education, but rather the direct product of centuries-old racial wealth gaps created and reinforced by policy.93

For those who already have student debt, lawmakers should ask some practical questions. How can the state make it easier for student loan borrowers to buy their first home? How can the state help its low-income student loan borrowers to access public benefits, such as CalFresh and Medi-Cal?94 Policy responses to those problems could have disparately positive benefits for communities of color.

For the benefit of future generations, the state should pursue debt-free college, a goal that is already shared by the UC System and is a stated aim of recent, partially-funded financial aid legislation.95 The research in this report helps show that the full enactment of pathways to debt-free college in California would have an outsized positive impact on the state’s communities of color. Policymakers should put low-income students first in line for new resources, using the Cal Grant Equity Framework as a readymade blueprint.96

California’s Present Is a Window into America’s Future

California borrowers make up 9 percent of the federal student loan portfolio, more than any other state.97 In this respect, California lawmakers have more influence over the national student debt crisis than do any other state’s leaders. This report has outlined key areas for further investigation and raised concerns about equity gaps between borrowers.

These questions are not just relevant to California: they may represent the direction U.S. student loan debt is headed. If President Biden and Democratic lawmakers succeed in passing tuition-free community college and doubling the Pell Grant, the nation may see fewer undergraduates borrowing loans, much like California sees. However, graduate debt, parent debt, and the disparate impacts of debt by race may become the areas of greatest concern for the country’s borrowers in the years to come, threatening to impede the forward progress many lawmakers and the public alike hope for. While it is in California’s interest to pursue solutions to these challenges, it is to all our benefit.

Additional analysis and commentary can be found in this report’s companion document, What the Data Tell Us About Student Loan Debt in California. The code for all original analysis in this report can be found at this GitHub repository.

This research was generously supported by the Haas Jr. Foundation. The author thanks Monica Martinez and Denise Castro for their feedback on drafts of this report, and Manny Rodriguez and colleagues at TICAS for feedback on research included in this report.

Notes

  1. In this report, the terms “Latino/a” and “Hispanic” are used with deference to how the dataset under focus identifies survey respondents.
  2. California Student Loan and Debt Service Review Workgroup, “Final Report,” California Student Aid Commission, 2021, https://www.csac.ca.gov/sites/main/files/file-attachments/final_report_california_student_loan_and_debt_service_review_workgroup.pdf?1632952132.
  3. Peter Granville, “What the Data Tell Us about Student Debt in California,” April 2023, https://rpubs.com/PeterGranville/CaliforniaStudentDebt, hereinafter referred to as “the companion report.”
  4. Source: author’s analysis of data from the National Postsecondary Student Aid Study. See Figure 2 in the companion report.
  5. Outstanding debt originated at the California State University (CSU) and University of California (UC) total $20 billion and $13 billion, respectively. Source: author’s analysis of data from the College Scorecard, via the U.S. Department of Education. See Table 6 in the companion report.
  6. The California Community College system produced 2.9 million awards between the 2011–12 academic year and the 2021–22 academic year. This does not include those who never received an award, and some students may account for multiple awards each. Source: author’s analysis of data from the California Community College Chancellor’s Office Data Mart, accessed March 2023, https://datamart.cccco.edu/Outcomes/Program_Awards.aspx.
  7. Source: author’s analysis of data from the Federal Student Aid Data Center. See Table 1 in the companion report.
  8.  Michael T. Nietzel, “Which States Have The Least And Most Expensive Public Colleges?” Forbes, November 1, 2021, https://www.forbes.com/sites/michaeltnietzel/2021/11/01/which-states-have–the-least-and-the-most-expensive-public-colleges/.
  9. This refers to all borrowers who reside in California, regardless of whether they attended college in California. Source: author’s analysis of data from the Federal Student Aid Data Center. See Table 1 in the companion report.
  10. The nationwide average is $8,500. Source: author’s analysis of data from the National Postsecondary Student Aid Study, via the National Center for Education Statistics. See Figure 2 in the companion report.
  11. Source: author’s analysis of data from the National Postsecondary Student Aid Study, via the National Center for Education Statistics. See Figure 3 in the companion report.
  12. Source: author’s analysis of data from the Federal Student Aid Data Center. See Figure 1 in the companion report.
  13. Source: author’s analysis of data from the Federal Student Aid Data Center. See Table 3 in the companion report.
  14. Source: author’s analysis of data from the National Postsecondary Student Aid Study, via the National Center for Education Statistics. See Figure 2 in the companion report.
  15. Source: author’s analysis of data from the National Postsecondary Student Aid Study, via the National Center for Education Statistics. See Figure 5 in the companion report.
  16. Source: author’s analysis of data from the National Postsecondary Student Aid Study, via the National Center for Education Statistics. See Figure 3 in the companion report.
  17. Source: author’s analysis of data from the National Postsecondary Student Aid Study, via the National Center for Education Statistics. See Figure 3 in the companion report.
  18. Source: author’s analysis of data from the Federal Student Aid Data Center. See Figure 1 in the companion report.
  19. Peter Granville, “Parent PLUS Borrowers: The Hidden Casualties of the Student Debt Crisis,” The Century Foundation, May 2022, https://tcf.org/content/report/parent-plus-borrowers-the-hidden-casualties-of-the-student-debt-crisis/.
  20. Specifically, the National Postsecondary Student Aid Study and the Survey of Household Economics and Decisionmaking. For more details about these data sources, see the companion report.
  21. These surveys provide sufficient data from California for us to compare the state with the other forty-nine states in the aggregate, but not enough to show the statistics for every individual state.
  22. Source: author’s analysis of data from the National Postsecondary Student Aid Study, via the National Center for Education Statistics. See Figure 2 in the companion report.
  23. Ibid. Across most groups, women borrow more than men, in California and in the nation overall. One exception is Pacific Islanders in California: Figure 3 in the companion report shows that Pacific Islander men in California borrow roughly 20 percent of the time, slightly above the 19 percent for Pacific Islander women in California.
  24. Source: author’s analysis of data from the National Postsecondary Student Aid Study, via the National Center for Education Statistics. See Figure 5 in the companion report.
  25. Ibid.
  26. Source: author’s analysis of data from the National Postsecondary Student Aid Study, via the National Center for Education Statistics. See Figure 3 in the companion report
  27. Ibid.
  28. In this report, the terms “Latino/a” and “Hispanic” are used with deference to how the dataset under focus identifies survey respondents.
  29. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 7 in the companion report.
  30. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 9 in the companion report.
  31. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 9 in the companion report.
  32. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 13 in the companion report.
  33. In the SHED sample of California households, 11 percent of Hispanic households had debt for a child or grandchild’s education, compared to 6 percent of white households. However, the sample size is too small to say conclusively that Hispanic families’ likelihood of holding parent-debt is higher. See Figure 12 and Table 13 in the companion report.
  34. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 18 in the companion report. I choose $75,000 because it is a natural break in the SHED data, which is reported in income brackets. As a point of comparison, the Census Bureau, using a different survey, finds that the median household income in California was $84,907 in 2021: see “Table S1901: Income in the past 12 months,” via U.S. Census Bureau, accessed April 2023, accessible at https://data.census.gov/table?t=Income+(Households,+Families,+Individuals)&g=040XX00US06&y=2021&tid=ACSST1Y2021.S1901.
  35. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 11 in the companion report.
  36. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 14 in the companion report.
  37. “Cost of Living in California,” SoFi, August 2022, https://www.sofi.com/cost-of-living-in-california/.
  38. Jalil B. Mustaffa and Jonathan C.W. Davis, “Jim Crow Debt: How Black Borrowers Experience Student Loans,” Washington, DC: The Education Trust, October 2021, https://edtrust.org/wp-content/uploads/2014/09/Jim-Crow-Debt_How-Black-Borrowers-Experience-Student-Loans_October-2021.pdf.
  39. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 17 in the companion report. The number $50,000 is used as a benchmark here due to how the data source reports income categories.
  40. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 19 in the companion report.
  41. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 22 in the companion report.
  42. This is known as the supplemental poverty measure. Source: “​​Table B-5. Number and Percentage of People in Poverty by State Using 3-Year Average: 2019, 2020, and 2021,” U.S. Census Bureau, accessed April 2023, https://www.census.gov/library/publications/2022/demo/p60-277.html
  43. Ibid.
  44. Jalil B. Mustaffa and Jonathan C.W. Davis, “Jim Crow Debt: How Black Borrowers Experience Student Loans,” Washington, DC: The Education Trust, October 2021, https://edtrust.org/wp-content/uploads/2014/09/Jim-Crow-Debt_How-Black-Borrowers-Experience-Student-Loans_October-2021.pdf.
  45. See the following: Anna Helhoski, “Current Student Loan Interest Rates and How They Work,” Nerdwallet, January 2023, https://www.nerdwallet.com/article/loans/student-loans/student-loan-interest-rates; Jeff Ostrowski, “Current home equity interest rates,” Bankrate, February 2023,  https://www.bankrate.com/home-equity/current-interest-rates; Matt Schulz, “Average Credit Card Interest Rate in America Today,” LendingTree, updated February 2023,  https://www.lendingtree.com/credit-cards/average-credit-card-interest-rate-in-america/.
  46. “SEARS Survey Spotlight: Credit Cards & Student Debt,” California Student Aid Commission, n.d., https://www.csac.ca.gov/sites/main/files/file-attachments/credit_cards_and_students_debt.pdf.
  47. Ibid.
  48. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 8 in the companion report.
  49. Ibid.
  50. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 15 in the companion report.
  51. Ibid.
  52. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 16 in the companion report.
  53. By comparison, 45 percent of Black student loan borrowers outside California and 39 percent of Black Californians without student loan debt report carrying balances most or all the time.
  54. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 21 in the companion report.
  55. “Interest Rates and Fees for Federal Student Loans,” U.S. Department of Education, n.d., accessed February 2023, https://studentaid.gov/understand-aid/types/loans/interest-rates.
  56. Peter Granville, “Parent PLUS Borrowers: The Hidden Casualties of the Student Debt Crisis,” The Century Foundation, May 2022, https://tcf.org/content/report/parent-plus-borrowers-the-hidden-casualties-of-the-student-debt-crisis/.
  57. Ibid.
  58. Source: author’s analysis of data from the Federal Student Aid Data Center. See Table 3 in the companion report.
  59. Source: author’s analysis of data from the Survey of Household Economics and Decisionmaking, via the U.S. Federal Reserve. See Figure 12 in the companion report.
  60. Source: Author’s analysis of data from the College Scorecard institution-level dataset, via the U.S. Department of Education. See Table 6 in the companion report.
  61. Source: Author’s analysis of data from the College Scorecard institution-level dataset, via the U.S. Department of Education.
  62. Source: Author’s analysis of data from the College Scorecard institution-level dataset, via the U.S. Department of Education. See Figure 36 in the companion report.
  63. Source: author’s analysis of data from the Federal Student Aid Data Center. See Figure 1 in the companion report.
  64. Ibid.
  65. Source: Author’s analysis of data from the College Scorecard institution-level dataset, via the U.S. Department of Education. See Figure 37 in the companion report.
  66. Ibid.
  67. Robert Shireman, “The For-Profit College Story: Scandal, Regulate, Forget, Repeat,” The Century Foundation, January 2017, https://tcf.org/content/report/profit-college-story-scandal-regulate-forget-repeat/.
  68. Unlike Stafford undergraduate loans, Stafford graduate loans are unsubsidized, meaning the government does not cover interest payments while the student is enrolled; however, the interest rates tend to be lower than Grad PLUS, and students can only take out a limited amount of Stafford graduate loans per year.
  69. Reflects interest rates for loans disbursed between July 1, 2022, and July 1, 2023. See “Interest Rates and Fees for Federal Student Loans,” U.S. Department of Education, n.d., accessed February 2023, https://studentaid.gov/understand-aid/types/loans/interest-rates.
  70. Source: author’s analysis of data from the Federal Student Aid Data Center. See Table 3 in the companion report.
  71. Ibid.
  72. Source: author’s analysis of data from the Federal Student Aid Data Center. See Figure 1 in the companion report.
  73. Source: author’s analysis of data from the Federal Student Aid Data Center. See Figure 41 in the companion report.
  74. Source: Author’s analysis of data from the College Scorecard institution-level dataset, via the U.S. Department of Education. See Figure 37 in the companion report.
  75. Source: Author’s analysis of data from the College Scorecard institution-level dataset, via the U.S. Department of Education. See Table 6 in the companion report.
  76. Source: Author’s analysis of data from the College Scorecard institution-level dataset, via the U.S. Department of Education. See Table 4 in the companion report.
  77. Researchers at the Education Trust, surveying Black student loan borrowers, found that a majority (65 percent) of those who pursued additional credentials after their initial borrowing did so to help ease the repayment burdens they already faced. See page 12 in Jalil B. Mustaffa and Jonathan C.W. Davis, “Jim Crow Debt: How Black Borrowers Experience Student Loans,” Washington, DC: The Education Trust, October 2021, https://edtrust.org/wp-content/uploads/2014/09/Jim-Crow-Debt_How-Black-Borrowers-Experience-Student-Loans_October-2021.pdf.
  78. See the “Public” quadrant in  Figure 37 in the companion report.
  79. Tess Thorman, Daniel Payares-Montoya, and Joseph Herrera, “Income Inequality in California,” San Francisco: Public Policy Institute of California, March 2023, https://www.ppic.org/publication/income-inequality-in-california/.
  80. “Cost of Living in California,” SoFi, August 2022, https://www.sofi.com/cost-of-living-in-california/.
  81. Source: Author’s analysis of data from the American Community Survey via the U.S. Census Bureau. See Table 12 in the companion report.
  82. The District of Columbia charts higher, with a high school-to-bachelor’s average wage increase of 149 percent.
  83. Source: Author’s analysis of data from the American Community Survey via the U.S. Census Bureau. See Table 12 in the companion report.
  84. The magnitude of these wage premiums can vary by group. Compared to the statewide figures provided above, the high school-to-bachelor’s income premium is even larger for Asian Californians (145 percent increase). The bachelor’s-to-graduate degree income premium is greatest for Asian Californians (64 percent increase) and Latino/a Californians (55 percent increase).
  85. Daniel Payares-Montoya, Tess Thorman, and Joseph Herrera, “Declining Higher Education Enrollment Could Widen Inequality in California,” San Francisco: Public Policy Institute of California, March 2023, https://www.ppic.org/blog/declining-higher-education-enrollment-could-widen-inequality-in-california/.
  86. Qualitative researchers have found that students identified as financially at-risk indicated they would prioritize paying their credit card bills above making student loan payments, if they have to choose only one after graduation. See Mary Beth Pinto and Phylis M. Mansfield, “Financially At-Risk College Students: An Exploratory Investigation of Student Loan Debt and Prioritization of Debt Repayment,” NASFAA Journal of Student Financial Aid 35, no. 2 (2005), https://files.eric.ed.gov/fulltext/EJ965802.pdf. Researchers also have found that higher levels of unpaid credit card debt are associated with higher levels of student loan debt. See  Victoria Javine,“Financial Knowledge and Student Loan Usage in College Students,” Department of Economics and Finance, Mitchell College of Business, University of South Alabama, 2012, https://academyfinancial.org/resources/Documents/Proceedings/2012/C1-Javine.pdf. Researchers have found that, at one public university in the Southwest, students who hold unpaid credit card debt were more likely to report lower financial satisfaction. See Oscar Solis and Ralph Ferguson, “The Relationship of Student Loan and Credit Card Debt on Financial Satisfaction of College Students,” College Student Journal 51, no. 3 (Fall 2017): 329–36, https://eric.ed.gov/?id=EJ1152788. And researchers have found that greater financial knowledge is associated with lower likelihood of delinquency on credit card debt and student loan debt alike. See Breno Braga, Signe-Mary McKernan, and Hannah Hassani, “Financial Knowledge and Past-Due Credit Card, Mortgage, and Student Loan Debt,” Urban Institute, November 2019, https://www.urban.org/sites/default/files/publication/101332/financial_knowledge_and_past-due_credit_card_mortgage_and_student_loan_debt.pdf.
  87. “SEARS Survey Spotlight: Credit Cards & Student Debt,” California Student Aid Commission, n.d., https://www.csac.ca.gov/sites/main/files/file-attachments/credit_cards_and_students_debt.pdf.
  88. “Education Stabilization Fund Programs Funded by the CARES Act, CRRSAA, and ARPA: Background and Analysis,” Congressional Research Service, updated January 2023, https://crsreports.congress.gov/product/pdf/R/R47027.
  89. Source: Author’s analysis of data from the College Scorecard institution-level dataset, via the U.S. Department of Education. See Table 8 in the companion report.
  90. At California State University-Northridge, the typical Parent PLUS borrower owes 71 percent of their original balance ten years into repayment.
  91. Stephen Burd, Rachel Fishman, Laura Keane, and Julie Habbert, “Decoding the Cost of College: The Case for Transparent Financial Aid Award Letters,” Washington, DC: The New America Foundation, June 2018, https://d1y8sb8igg2f8e.cloudfront.net/documents/Decoding_the_Cost_of_College_Final_6218.pdf.
  92. “Ineligible Cal Grant Schools for 2022-23,” Sacramento, CA: California Student Aid Commission, n.d., accessed May 2023, https://www.csac.ca.gov/sites/main/files/file-attachments/2022-23_ineligible_cal_grant_schools.pdf.
  93. “A California panel has called for billions in reparations for descendants of slaves”, The Associated Press via NPR, May 7, 2023, https://www.npr.org/2023/05/07/1174627337/a-california-panel-has-called-for-billions-in-reparations-for-black-residents.
  94. These are the names of California’s SNAP and Medicaid programs.
  95. Mikhail Zinshteyn, “UC system takes another step toward keeping students debt-free,” CalMatters, May 2022, https://calmatters.org/education/higher-education/2022/05/student-loans-uc/. Mikhail Zinshteyn, “Debt-Free College: California’s On The Verge Of Spending Over $600M To Help College Students,” LAist, April 2022, https://laist.com/news/education/debt-free-college-californias-on-verge-of-spending-over-a-half-billion-dollars-to-help-360-000-students.
  96. “Cal Grant Equity Framework,” Sacramento, CA: California Student Aid Commission, n.d., accessed May 2023, https://www.csac.ca.gov/cal-grant-equity-framework.
  97. Source: author’s analysis of data from the Federal Student Aid Data Center. See Table 2 in the companion report.

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