Many college students nationally unaware of debt

A majority of first-year undergraduates can't correctly estimate how much student loan debt they're taking on.

More surprising, among college freshmen who have taken out federal student loans, more than a quarter (28 percent) don't think they have any federal debt, and 14 percent don't think they have any debt at all.

Those are the findings of a new Brookings Institution report authored by Beth Akers and Matt Chingos. Nationally, less than one quarter of first-year students were able to correctly estimate their debt totals within 10 percent of the actual value. A majority - 51 percent - underestimated their debt, while another 25 percent actually overestimated it.

The numbers come from the National Postsecondary Student Aid Study, a representative survey of college students conducted in the spring of the 2011-2012 school year.

If anything, the numbers probably undercount the students who don't understand their debt loads.

'These results are particularly surprising given that we have limited the data to first-year undergraduate students, who are unlikely to have student debt from prior years and thus should not be confused by previously accumulated debt,” Akers and Chingos write.

The new research underscores that students' perceptions of their debt matter when it comes to making choices affecting their education and careers.

'Students who do not have a good idea of their level of borrowing may make expensive mistakes that they will later come to regret,” Akers and Chingos conclude. 'They also are likely to be surprised or even fearful when their first loan payments come due, which may impose an emotional burden on borrowers.”