40% of student borrowers lack a four-year degree

As Republicans see it, President Joe Biden’s student debt relief plan is a gift to the well-off. But Sen. Elizabeth Warren, D-Mass., has pushed back against the image of the privileged borrower.

"40% of the folks who have student loans do not have a college diploma, four-year diploma," Warren said Aug. 28 on CNN’s State of the Union. "These are people who are truck drivers and who are nail technicians and nurses’ aides."

The data isn’t perfect, but there is substance behind Warren’s claims about borrowers, their degrees and occupations.

Two data sets shine some light on degrees held by federal borrowers. Both back up Warren.

The National Center for Education Statistics looked at students at thousands of schools who borrowed when starting college in 2012 and then checked on their status five years later.

By 2017, 39% had no degree, 10% had a technical certificate, 11% had an associate’s degree and 40% had a bachelor’s degree. Those results suggest that Warren underestimated the number of borrowers without a four-year degree —the number could be as high as 60%.

But the survey has limits.

"It’s incomplete because it’s only a snapshot of 2012 freshmen, and it only follows them for five years, and completion rates are often longer than five years," said Adam Looney, a University of Utah economist and senior fellow at the Brookings Institution in Washington, D.C.

Looney also said the survey doesn’t include borrowers in graduate school, who already have bachelor’s degrees. Adding them would lower the percentages for the non-college degree group.

Like Warren, the White House has also relied on the national center’s data. It counted borrowers a slightly different way and estimated that about a third of borrowers didn’t get a college degree. But that excluded the 20% of students with certificates or associate degrees.

Meanwhile, the Federal Reserve’s Survey of Consumer Finances for 2019 found that for 43% of households with education debt, the person answering the survey questions did not have a college degree. 

The survey also leaves some gaps. First, it counts  households, and Warren was talking about individuals. That means the survey can tell us only that someone in the household had student debt.

Also, the person answering the questions might not be the borrower, such as a parent without a college degree who has a child in college.

"Because we don’t know whose student debt it is, we’re not able to make a direct connection to completion status," said Jason Jabbari, assistant professor in the Social Policy Institute at Washington University in St. Louis.

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Jabbari’s own research on low-income borrowers found that about 35% of debtholders lacked four-year degrees. Jabbari cautions that his number might not be nationally representative because of his focus on lower-earning people, but Warren’s number is in line with it. 

Looney said to fully vet Warren’s claim, "there are not great answers available." At the same time, he said her figure "is a pretty good guess."

Economist Dora Gicheva at the University of North Carolina, Greensboro pointed to a 2009 study of student borrowers. Based on that work, she calculated that 33% had a college degree after five years, leaving 67% without one. The data Gicheva cited is more than a decade old, but it also bolsters Warren’s figures.  

Warren described some of these borrowers without college degrees as truck drivers, nail technicians and nurses’ aides. Her office said she drew those occupations from Looney’s 2020 analysis that looked at which degree programs account for how many borrowers.

As you drill into Looney’s data (which can be downloaded here), associate degree and certificate programs for two of the jobs Warren mentioned — in cosmetology and health care — rank high in popularity as measured by the number of borrowers. 

Looney found that a certificate in cosmetology ranks fifth in popularity across programs at any degree level, with 2.9% of borrowers. With tens of millions of borrowers, that 2.9% adds up to tens of thousands of people.  (Though Warren mentioned nail technicians, there is no specific program for manicurists.) 

Four health care-related programs — each with educational paths shorter than four years — account for 7% of all student borrowers. There is no simple way to tie these programs to specific job titles, but depending on a state’s rules, they would include nursing aides.

Among the 20 programs most used by borrowers, those shorter than four years account for about a third of borrowers.

Warren also mentioned truck drivers. The closest match within the list of programs would be a certificate in ground transportation. That represents 0.25% of borrowers. Auto mechanics are more numerous, constituting 0.88% of borrowers.

Warren spokesman Alex Sarabia said truck drivers with debt would benefit from debt relief.

"The average income for truck drivers is about $70,000 a year, exactly the kind of middle-class worker the Biden administration is helping," Sarabia said.

Debt relief is available for people who earn up to $125,000 a year.

Warren said that "40% of the folks who have student loans do not have a college diploma, four-year diploma. These are people who are truck drivers and who are nail technicians and nurses’ aides."

The data on borrowers and the degrees they hold are imperfect, but they support Warren’s statistic. Some of the data suggests she underestimated the number, which could be as high as 60%.

As for the types of jobs touched by Biden’s plan, a sizable percentage of people took on student debt to attend non-college degree programs in cosmetology and nursing and health care. Truck drivers are less numerous, but they are still  among the borrowers. 

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