Stories about staggering loads of student debt are everywhere, from the business school alums with loans worth six figures to the college graduate who faces $800 monthly loan payments.
But dig deeper, and a very different picture of the student debt crisis emerges. Those most at risk of defaulting on their loans turn out to be those who borrow the least, according to a recent study for the Association of Community College Trustees.
The report focused on Iowa's community colleges, but its authors point out that it reflects in general "the complexities that students face when trying to repay their federal loans." In the Iowa institutions, more than 1 in 4 of students who entered repayment between Oct. 1, 2010, and Sept. 30, 2011 — officially, the fiscal 2011 cohort — defaulted on their loans by January 2015. Almost half of those borrowers borrowed less than $5,000, and most borrowed under $10,000, the researchers found.
"Although community college students typically borrow less than students at colleges and universities in other sectors, community college borrowers frequently struggle to repay their loan debts," wrote Noah Brown, president of the association, in a foreword to the study.