The 2016 AFCPE Annual Symposium kicked off with an audible gasp. Justin Draeger, President of the National Association of Student Financial Aid Administrators, delivered the Welcome Session and dropped a bombshell: those most likely to default on student loan debt owe $5,000 or less. For an auditorium full of Accredited Financial Counselor® professionals, this was shocking news. Mr. Draeger went on to share a few more staggering statistics before concluding, somewhat controversially, that there is not a looming student debt bubble.

There are very real issues that some students face when borrowing to pay for school. Despite the prevalence of anecdotes about students leaving school with $100,000 in debt, those borrowers only comprise 1 percent of total student loan borrowers. Citing the hyper-focus on national student loan debt, Draeger stated that the conversation has moved from facts to feelings. This is detrimental to the real and important conversation about how to help students who are actually in crisis and are largely ignored.

Some interesting data from the research:

  • 33% of bachelor’s recipients graduate with no debt
  • 25% of bachelor’s recipients graduate with less than $20,000 for four years
  • Nearly 50% of outstanding debt is held by those with incomes in the top 25% households nationwide
  • 11% is held by households in the lowest income brackets

So, who is in crisis? Research shows that those in the worst position are students with relatively low amounts of debt who drop out of college and those with no degree and no credentials who must repay their student loans. Typically, they are students who attended “expensive, sub-par” institutions.


Mr. Draeger ended on a positive note, offering a few key take-a-ways for prospective students.

  • Only borrow what you need.
  • Develop an education plan and budget accordingly.
  • Plan for the full four years.

An AFC® could not have said it any better.

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