Aspects of undergraduate finances: Using the NPSAS data to analyze borrowing in Minnesota and Connecticut Tricia Grimes Shefali Mehta Minnesota Office of Higher Education June 2006 Presented for the Student Financial Aid Research Network Conference, June 22-24, 2006 in Providence, Rhode Island

June 2006Minnesota Office of Higher Education2 NPSAS 2004 provided data for detailed state-level analysis for 12 states for the three major institutional sectors The dataset provides over 1,000 variables on finances, demographics, persistence, and attendance. While the data provide much useful information that was not previously available, there are several areas where it is necessary to use the data with caution. Todays presentation will focus on borrowing characteristics in Minnesota and Connecticut while highlighting the issues in analyzing these data. The National Postsecondary Student Aid Study (NPSAS)

Overview of finances in the 12 states Income, tuition and borrowing for undergraduates

June 2006Minnesota Office of Higher Education4 Income distributions by dependent status Income distributions ranked by median $45,100$24,100$10,900$86,000$51,500$28,300New York $56,500$27,400$11,100$89,800$53,600$26,200California $43,400$24,500$11,300$90,100$55,000$30,400Georgia $46,200$24,700$11,000$88,800$57,000$29,400Texas $50,200$27,700$12,800$82,500$57,600$37,700Nebraska $54,900$32,700$17,400$95,200$58,200$34,000Delaware $49,900$24,500$9,000$88,600$59,200$35,600Oregon $53,000$26,600$11,600$85,200$61,000$33,700Tennessee $55,100$30,400$13,700$91,500$61,200$36,200Illinois $62,700$30,800$14,200$94,700$66,500$39,600Connecticut $51,200$28,700$11,500$98,600$67,100$42,200Indiana $55,600$30,700$14,800$93,200$67,800$39,600Minnesota $50,100$26,500$12,700$90,000$58,200$32,500U.S. 75th %50th %25th %75th %50th %25th % Independent (residents)Dependent (residents)

June 2006Minnesota Office of Higher Education5 Tuition and fees in the 12 states Tuition and fees ranked by median $6,300$2,200$1,700 Delaware$2,000$320$180 California $6,000$2,500$550 California$3,200$1,100$540 Texas $5,100$3,200$2,600 Georgia$3,100$1,400$590 Georgia $4,800$3,500$1,700 Texas$5,200$1,500$630 Illinois $9,300$3,800$3,200 Nebraska$3,900$1,900$910 Tennessee $10,000$3,900$3,100 Tennessee$5,000$1,900$650 Oregon $7,700$4,400$3,300 Minnesota$6,600$2,300$1,100 Delaware $11,000$5,000$1,800 Illinois$5,800$3,000$1,300 Indiana $7,000$5,300$4,200 Oregon$4,100$3,100$1,300 Nebraska $17,000$5,400$3,800 Indiana$5,800$3,400$1,700 Minnesota $18,000$5,700$4,300 New York$11,000$4,300$2,300 New York $24,000$6,800$5,000 Connecticut$18,000$5,000$1,500 Connecticut $9,800$4,800$2,800U.S.$5,400$2,300$790U.S. 75th %50th %25th % 75th %50th %25th % Undergraduates attending full-time, full yearAll undergraduates

June 2006Minnesota Office of Higher Education6 Overall annual borrowing in the 12 states Ranked by percent who borrowed $5,50016% California $5,30025% Illinois $5,70025% Georgia $5,80026% Texas $5,70030% Delaware $6,80034% Connecticut $5,80034% Oregon $5,20037% Tennessee $5,60039% Indiana $6,00040% New York $5,00046% Nebraska $6,10049% Minnesota $5,80035%U.S. Total loans Percent who borrowed Total loans (95% confidence intervals) $5,700$5,30017%14% $5,600$5,00027%23% $6,000$5,40027%23% $6,000$5,60028%25% $6,400$5,00033%27% $7,600$6,00036%32% $6,200$5,50036%33% $5,400$5,00038%35% $5,900$5,30040%37% $6,400$5,70042%38% $5,200$4,70048%43% $6,400$5,80051%48% $5,900$5,70035% Percent who borrowed (95% confidence intervals)

Borrowing in Minnesota and Connecticut Undergraduate borrowing by attendance status, sector and class level

June 2006Minnesota Office of Higher Education8 Enrollment across institutional sectors: CT and MN The difference in enrollment between the public 2-year and private not-for- profit 4-year sector is substantial.

June 2006Minnesota Office of Higher Education9 Borrowing by attendance status: Minnesota

June 2006Minnesota Office of Higher Education10 Borrowing by attendance status: Connecticut

June 2006Minnesota Office of Higher Education11 Average loan amount by attendance status

June 2006Minnesota Office of Higher Education12 Percent who borrowed by attendance status

June 2006Minnesota Office of Higher Education13 Average loan amount by dependent students parents income

June 2006Minnesota Office of Higher Education14 Percent who borrowed by dependent students parents income

June 2006Minnesota Office of Higher Education15 Average loan amount by full-time students by institutional sector

June 2006Minnesota Office of Higher Education16 Percent who borrowed by institutional sector

June 2006Minnesota Office of Higher Education17 Average cumulative borrowing for graduating seniors by sector

June 2006Minnesota Office of Higher Education18 Percent of graduating seniors who borrowed by sector

June 2006Minnesota Office of Higher Education19 Reports and articles for Minnesota

June 2006Minnesota Office of Higher Education20 Findings and discussion Borrowing under some variables is similar but on the whole, the percent who borrowed in Minnesota is higher than in Connecticut Answering these questions requires more complex models to deal with these complex relationships that can not be analyzed by basic descriptive statistics or linear regression Minnesota has found the state-level data to be very useful –It helps to have a graduate intern who can spend dedicated time on mining the data. –We are grateful for Lumina Foundation support

June 2006Minnesota Office of Higher Education21 Findings and discussion - continued If we had it to do over again, we would like a larger sample and we would like the sample to include students in the for- profit sector –A sample of 1,800 is a nice size, but when you want to look at full- time students you end up with about 900, then dependent students gets you about 450 and when you cut it by sector and income, the sample size is too small for meaningful analysis.

June 2006Minnesota Office of Higher Education22 Findings and discussion - continued One of the major advantages of NPSAS data is information on students who did not apply for aid –In Minnesota there was less precision on this data because the two public systems interpreted federal and Minnesota data privacy laws to mean they could provide little information about students who had not filled out a FAFSA. If these systems change the data warning in their student application materials, they should be able to provide more complete data. Another major advantage is information on aid from all sources –Private and state loans –Institution and private grants and scholarships

The End Thank you For questions or comments, please contact us: Tricia Grimes, Shefali Mehta,