The 1985 through 1995 period saw an increase in both the number of college students and the proportion of the college-aged population in colleges, universities, training schools, and other postsecondary institutions. In 1995, more than 34 percent of all 18- to 24-year-old U.S. residents were attending postsecondary schools, compared with slightly less than 28 percent in 1985. Many who attend also plan to stay longer: Two-thirds of college freshmen now intend to go beyond a baccalaureate degree, compared with about half in 1980. In part, this interest in postsecondary education likely reflects students’ recognition that such education is associated with higher incomes later in life. Bureau of the Census statistics indicate that, on average, households headed by persons with bachelor’s degrees have average incomes nearly 70 percent higher than households headed by persons with no more than high school diplomas. Households with a member that has a professional degree have incomes that average about three times those of households in which members’ highest certificate is a high school diploma. As the number of students has increased, so has the size of the government’s student loan programs. By the end of fiscal year 1996, the estimated outstanding amount of loans provided by the Department of Education’s two largest loan programs, the principal sources of loans for postsecondary education, had reached $112 billion, up from $91 billion a year earlier and from $65 billion in 1990, in constant 1995-96 dollars. The Higher Education Amendments of 1992 increased the maximum amount that students could borrow. For example, the limit for graduate and professional students rose from $74,750 to $138,500 (in current dollars, including both graduate and undergraduate loans). Borrowing and working both play significant roles in how students pay for their education. Figure 1 shows how an “average” full-time student met the cost of his or her education at various types of postsecondary institutions in school year 1995-96. Together, borrowing and working constituted more than half of the amount of funds students needed to pay their cost of attendance at all types of schools, except private 4-year schools. While this “average” view is instructive as a way to see the general role of student borrowing and working patterns, it does not show the wide range of methods students use to finance college. Some students do not borrow or work at all, while others earn more than enough to cover the cost of attending college. To provide a more complete picture, our report focuses on those students who borrow and those who work, showing the annual and cumulative amounts of their borrowing and the number of hours worked per week while they were enrolled. The proportion of students who borrowed to finance the cost of postsecondary education increased between school years 1992-93 and 1995-96, and the amounts they borrowed increased, after taking inflation into account. In general, this was true for both undergraduates and graduate and professional students. An increasing percentage of undergraduates in all types of programs turned to borrowing to finance part of their education. To provide as complete a picture as possible of how students used borrowing during their entire period of enrollment, we focused our analysis on undergraduates who had completed their 2-year, 4-year, or other programs in 1992-93 and 1995-96. In 1992-93, 41 percent of undergraduates who completed their programs had borrowed in 1 or more years. By 1995-96, this number had risen to 52 percent. The percentage varied, however, by type of degree or certificate, with the greatest increase in the group receiving bachelor’s degrees (see table 1). The average amount borrowed by undergraduates completing their program (excluding those who had not borrowed) rose from about $7,800 to about $9,700 over the 1992-93 to 1995-96 period, after adjusting for inflation. The amounts borrowed by those receiving bachelor’s degrees in 1995-96 were the highest. Among bachelor’s degree recipients, the portion of students who had borrowed $20,000 or more for the 1992-93 through 1995-96 time period rose from about 9 percent to about 19 percent of graduating seniors who had borrowed; see table 2. (See tables II.2, II.3, and II.4 for supporting data, including confidence intervals (degree of precision) for the estimates.) The most substantial increases in the number of graduating students who borrowed occurred at public schools. At 4-year public schools, the percentage of graduating seniors who borrowed in 1 or more years rose from 42 percent in 1992-93 to 60 percent in 1995-96 (see table 3.) This increase eliminated the earlier difference between public and private 4-year schools in the percentage of students borrowing in 1 or more years—public school students “caught up” to private school students in terms of the percentage of the group that borrowed. Students at private schools, however, still borrowed larger amounts during both school years. Students graduating from public schools offering less than 4-year degrees also borrowed in substantially higher numbers, although the average amount borrowed changed little after taking inflation into account. In the aggregate, borrowing by graduate and professional students also increased. In 1992-93, about 55 percent of graduate and professional students who completed their degrees had borrowed in 1 or more years, and those who had borrowed had a cumulative debt (for graduate, professional, and undergraduate education) averaging $16,990. By 1995-96, about 62 percent of this group borrowed, and their cumulative debt averaged $24,340. Students in professional programs were the most likely to borrow and had the highest levels of debt. For 1995-96, students completing professional programs had an average debt of $59,909, and the percentage of students who borrowed more than $50,000 had increased from 34 percent to 60 percent. (See table 4.) Changes in students’ employment have been less pronounced than changes in borrowing. Compared with 1992-93, the percentage of full-time undergraduate students who worked while attending school rose slightly, while the percentage of graduate and professional students who worked generally declined. Among those who worked, the average number of hours remained relatively steady. Most full-time undergraduate students worked during the school year in both 1992-93 and 1995-96. The percentage of full-time students who worked rose in all three program categories—certificate or award, associate degree, and bachelor’s degree. Overall, during 1995-96 more than two-thirds of full-time undergraduates worked while enrolled. On average, undergraduates worked 23 hours per week; however, this varied considerably by program, with students in associate and certificate or award programs working the most. The average number of hours worked per week did not change appreciably from 1992-93, although it rose somewhat among students completing associate degree programs. (See table 5.) At 4-year and proprietary schools, the percentage of full-time, full-year undergraduates who worked during the 1995-96 school year was substantially higher than the percentage who worked in 1992-93. (See table 6.) Average hours worked per week did not change significantly. (See tables II.6, II.7, and II.8.) Students in master’s and doctoral programs in school year 1995-96 were more likely to work, and to work more hours per week, than were students in professional programs. Working students in professional programs averaged about 20 hours of work a week, while those in master’s and doctoral programs averaged about 25 to 30 hours per week. Many of these students held jobs in their field of study, such as teaching or research assistance. About 80 percent of full-time doctoral students who worked while enrolled said they held positions directly related to their studies, compared with about 63 percent of students in master’s programs and about two-thirds of students in professional programs. However, even though more students in master’s and professional programs worked in off-campus jobs than did doctoral students, most of them still regarded their jobs as closely related to their field of study. (See table 7.) To gain a better understanding of student work and borrowing patterns during school year 1995-96, we analyzed amounts borrowed and hours worked by several factors, including type of school, cost of attendance, year in school, dependency status, gender, family income, race/ethnicity, cost of attendance, and expected family contribution. We focused this analysis on undergraduate students because the data for graduate and professional students did not produce statistically meaningful results when divided into many of the categories and subcategories we analyzed. (See app. III for further details on our analyses.) To help identify the relationships between the various factors selected for analysis, we conducted a series of regression analyses. Regression analysis is a statistical technique that can analyze many factors at the same time and estimate their relationship to a given outcome. In this case, our analyses were directed at determining what factors, if any, help predict the amount of money that students borrowed. Our results indicated that none of the factors we examined are strong predictors of the amount of student borrowing. Not surprisingly, the most influential factor that emerged from our analyses was the cost of the school attended. However, this factor accounted for only about 11 percent of the difference in the amounts of borrowing that occurred, after controlling for other factors. Several factors that helped account for smaller portions of the variation in amounts borrowed were the student’s class level (freshmen, sophomore, junior, or senior), the amount of grant aid received, and whether the student was independent. Other factors included in the analysis (type of school, race/ethnicity, adjusted gross family income percentile, expected family contribution, and hours worked per week while enrolled) accounted for little, if any, variation. Together, all of the factors we examined accounted for about 31 percent of the variation in the amounts borrowed.