Description: Trends in tuition and financial aid policy have increased the number of students who borrow for higher education and the aggregate debt students acquire. Most research on student borrowing over the years has analyzed the effects of borrowing and the prospects of indebtedness on individual students' choices and persistence. However, dynamics at the institutional level such as the need to ensure a stable flow of resources may accelerate or slow down student borrowing. Drawing on resource dependence theory, this study examined changes in student borrowing at private not for profit four year institutions in the US to identify trends and implications. A fixed effects regression analysis was applied to panel data from the Delta Cost project and the National Association of College and University Business Officers. Analytical focus was on the financial and enrollment characteristics of private not for profit four-year institutions, the relationship between these characteristics and student borrowing, and whether these relationships are stable or change over time. Findings revealed that the financial and enrollment characteristics of private not for profit institutions during the study period were characterized by gradual variation. The results also revealed that most of the financial characteristics were predictive of student borrowing and that these relationships vary with time. Evidence from this study cautions higher education policy makers that high tuition dependence and the attendant student loan burden may disadvantage some students. Policy makers concerned about providing equitable access to higher education to all student subpopulations should try to moderate competition among institutions and tuition rises that intensify student borrowing. Institutional practices such as tuition maximization and selective price discrimination must be moderated so that financial aid, including loans, can realize the objective of encouraging fairness and choice in higher education entry.
Date: May 2018
Creator: Namalefe, Susan A