The recent article, “American University has highest student debt among D.C. Universities,” touches upon financial concerns that are reverberating nationally, as well as here at AU.
However, AU’s average student indebtedness figure for the class of 2010 ($36,206) as reported by the Project on Student Debt and cited by The Eagle can be somewhat misleading when not explained in context.
We understand that the average debt figure seems daunting, especially in these hard economic times, but keep in mind the figure only focuses on the percentage of the class who took out student loans. What is not reflected in the figure reported is amount of financial assistance that AU provides to our students to help reduce costs and allow them to meet their educational goals.
To put financing one’s education into perspective, let’s talk numbers for AU’s class of 2010:
• 78 percent of the class of 2010 received some form of financial aid;
• 61 percent of the class received some form of AU institutional funding (merit and/or need-based);
• 56 percent of the class borrowed student loans;
• 44 percent of the class did not take out a loan.
Interestingly, the percentage of loan borrowers at AU is below the 65 percent national average for students attending four year, private, nonprofit universities who took out a student loan during their college tenure, according to The Chronicle of Higher Education.
Now, to break down the numbers for the 56 percent that borrowed: Two-thirds only borrowed federal loans, and, of those, the average indebtedness at graduation was $21,146. By contrast, 19 percent borrowed private loans, and their average loan indebtedness was nearly three times greater than those borrowing only federal loans. This small contingent of large borrowers drastically skews the student loan indebtedness average for AU’s class of 2010.
Moreover, nearly a quarter of students who borrowed private loans did not demonstrate financial need and/or did not apply for financial assistance. These are students who, most likely, opted to use loans as a financing tool.
Additionally, for the 2010 graduating class, AU provided far more institutional grants and scholarships than students borrowed — by more than 60 percent. Institutional expenditures totaled $152,906,566 compared to $91,239,120 in loan expenditures during the same four-year period.
Since the recession, our office and the University have had a heightened sensitivity to unexpected financial hardships families are facing, and we have taken steps to determine how best to use the University’s resources to increase institutional support to students.
This academic year alone, $69 million of the University’s budget has gone towards financial aid, and financial aid expenditures are third behind personnel (faculty and staff) and supplies in the overall budget, an indication of the University’s commitment towards the students.
In addition, one strategy we implemented this year to aggressively address student need was to redirect funds used for merit scholarships to need-based financial aid in order to cover a greater percentage of the financial need of students. As such, nearly 100 percent of eligible incoming students had 100 percent of their demonstrated financial need met.
As always, we encourage students and families to contact our office if they have concerns regarding financing an AU education. For current students, the best place to start is AU Central at x8000 or via email at aucentral@american.edu .
Brian Lee Sang
Director of Financial Aid
Sharon Alston
Vice Provost for Undergraduate Enrollment
