Debt burden after college: the effect of student loan debt on graduates’ employment, additional schooling, family formation, and home ownership

Erin Velez, Melissa Cominole and Alexander Bentz

Education Economics, 2019, vol. 27, issue 2, 186-206

Abstract: This paper measures the effects of undergraduate student loan debt on graduates’ post-college outcomes: employment, additional enrollment, family formation, home ownership, and net worth. The analysis uses data from a nationally representative sample of 2007–08 bachelor’s degree recipients. Because a graduate’s debt burden is not randomly assigned, we use an instrumental variable – enrollment-weighted average in-state tuition over four years – to estimate the effect of debt on post-baccalaureate outcomes while minimizing selection bias. We find that four years after graduating, undergraduate debt is related to borrowers’ earnings, job choice, decisions to marry and have children, and net worth.

Date: 2019
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DOI: 10.1080/09645292.2018.1541167

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