The role of student financial resources, college experiences, institutional and state characteristics in explaining undergraduate borrowing

Insights from theory and prior research suggest that student background characteristics, student financial resources, student college experiences, institutional characteristics and state characteristics are related to student loan use and amount borrowed. It is not clear to what extent student financial resources and college experiences may explain who borrows and how much, net of differences in student background characteristics and characteristics of the institutions and states where the students attended college. In this study I use data from the cross-sectional, nationally representative National Postsecondary Student Aid Study (NPSAS:12) to identify predictors of student loan use and amount borrowed among undergraduate students enrolled in bachelor’s degree programs at four-year public, private nonprofit and for-profit institutions in the U.S. I use descriptive statistics and zero-inflated negative binomial regression analyses to identify the proportion of students who borrowed; average amount of student loans borrowed; predictors of student loan use; predictors of how much is borrowed; and how predictors of student loan use and amount borrowed vary by institutional control. I find that student, institutional and state characteristics are significantly related to the odds of participation in borrowing. The role of student financial resources and college experiences is small and the role of institutional and state characteristics is modest at best in explaining how much participating students borrow. Findings from this study expand scholarly knowledge about patterns and predictors of borrowing among undergraduates at public, private nonprofit and for-profit four-year institutions, and suggest that federal, state, and institutional policies in the U.S. may be most effective in decreasing student loan debt if they are designed to decrease the odds that students will participate in borrowing