Who are the people having the hardest time repaying student loans?

WASHINGTON - The people having the hardest time repaying their student loans are not graduates with six-figure debt, rather they are borrowers who took out a fraction of that amount, attended for-profit or community colleges and never earned a degree, according to a report released Tuesday by the White House.

The findings are in line with a body of research that is changing the conversation about what was widely considered a student debt crisis, but now seems more like a student debt burden. That burden is largely borne by low-income students whose families lack the resources to help them cover the debt and those who attend for-profit colleges, according to the report.

"College is a really good deal and one of the most important investments you could make ... but if you go to a school that is not high quality, if you don't complete or get unlucky in terms of your earnings, you can face difficulties," said Jason Furman, chairman of the Council of Economic Advisers. "A college education is not a guarantee, so it is important to select the right school."

Drawing on recent data from the Department of Education, the report notes that for-profit college students have lower earnings, higher levels of unemployment and are more likely to default on their loans than those who attended community colleges or four-year schools. Still, the returns for students attending two- and four-year institutions vary by major, with students studying science and technology pulling in higher earnings after graduation.

The report gives a broad overview of existing research from academics and economists on the value of college, impacts of student debt and the distribution of that debt. Furman said the long-term value of higher education may be getting lost in all of the discussion of rising student debt. The White House, he said, is concerned that students may get tripped up on the cost of college without realizing that their earning potential will far outweigh the investment.

"There is an awful lot of misinformation in the narrative and the debate. Some of this is a synthesis that puts together a sensible perspective," Furman said of the report. "The amount of extra money you make as a result of going to college is well in excess of the debt you incur or the cost of college."

Despite a surge in federal student loan borrowing since the 2008 recession, nearly 60 percent of borrowers owe less than $20,000 in undergraduate debt. Of that number, 42 percent owe less than $10,000, with the average amount of loans held by people who pursued a certificate, associates or bachelor's degree at $17,900 in 2015. That number includes people who did not graduate.

Between 2009 and 2015, the largest increases in cumulative outstanding debt occurred for students attending community and for-profit colleges, where debt grew by 159 percent and 142 percent respectively. As the job market has improved and enrollments have declined, there are fewer borrowed dollars pouring into either sector, according to the report.

A majority of borrowers are making progress paying back their loans after five years, paying down the principal not just the interest accruing on the debt, according to the report. Of the people who entered repayment in 2009, 17 percent had paid off all of their debt after five years as their earnings grew.

The Obama administration has given Americans more options for repaying their student debt so they can avoid default, expanding income-driven plans that require little to no money from people in dire straits. Direct outreach by the Education Department and marketing campaigns has quadrupled in the last four years, with nearly 5 million people currently enrolled in the plans.

Still, the amount of people severely behind on their debt remains stubbornly high. At the end of March, 7.9 million people had not made a payment on $121 billion in student loans for at least nine months, a nearly 8 percent increase over the same period a year earlier, according to the latest data from the department.

More than half of the people in default have loans from the old bank-based federal lending program, but the number of borrowers with newer loans falling behind on payments is creeping up. Some people are defaulting for at least the second time, signaling a breakdown in the management of their loans.

Defaults are concentrated among people with small-volume loans, mainly because these borrowers are less likely to have completed their degrees. The White House said loans of less than $10,000 account for nearly two-thirds of all defaults, a fact that the Federal Reserve Bank of New York has raised in recent years.

Ajita Menon, special assistant to the president for higher education policy, said the findings from Tuesday's report can help loan servicers, the middlemen who collect and apply payments on the government's behalf, create a more targeted approach to help students who are at risk of defaulting on their loans.