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Research papers on Student loan debt

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  1. Student Loans: Do College Students Borrow Too Much—Or Not Enough?

    Christopher Avery, Sarah Turner · 2012 · The Journal of Economic Perspectives · 392 citations

    Total student loan debt rose to over $800 billion in June 2010, overtaking total credit card debt outstanding for the first time. By the time this article sees print, the continually updated Student Loan Debt Clock will show an accumulated total of roughly $1 trillion. Borrowing to finance educational expenditures has been increasing—more than quadrupling in real dollars since the early 1990s. The sheer magnitude of these figures has led to increased public commentary on the level of student borrowing. We move the discussion of student loans away from anecdote by establishing a framework for considering the use of student loans in the optimal financing of collegiate investments. From a finan

  2. Is a Household Debt Overhang Holding Back Consumption?

    Karen E. Dynan · 2012 · Brookings Papers on Economic Activity · 325 citations

    The recent plunge in U.S. home prices left many households that had borrowed voraciously during the credit boom highly leveraged, with very high levels of debt relative to the value of their assets. Analysts often assert that this “debt overhang” created a need for household deleveraging that, in turn, has been depressing consumer spending and impeding the economic recovery. This paper uses household-level data to examine this hypothesis. I find that highly leveraged homeowners had larger declines in spending between 2007 and 2009 than other homeowners, despite having smaller changes in net worth, suggesting that their leverage weighed on consumption above and beyond what would have been pre

  3. A Crisis in Student Loans?: How Changes in the Characteristics of Borrowers and in the Institutions They Attended Contributed to Rising Loan Defaults

    Adam Looney, Constantine Yannelis · 2015 · Brookings Papers on Economic Activity · 279 citations

    This paper examines the rise in student loan default and delinquency. It draws on a unique set of administrative data on federal student borrowing matched to earnings records from de-identified tax records. Most of the increase in default is associated with borrowers at for-profit schools, 2-year institutions, and certain other nonselective institutions. Historically, students at these institutions have constituted a small share of all student borrowers. These nontraditional borrowers have largely come from lower-income families, attended institutions with relatively weak educational outcomes, faced poor labor market outcomes after leaving school, and defaulted at high rates. In contrast, de

  4. Effect of medical student debt on mental health, academic performance and specialty choice: a systematic review

    Monique Simone Pisaniello, Adon Toru Asahina, Stephen Bacchi, et al. · 2019 · BMJ Open · 233 citations

    Objectives With the high and rising total cost of medical school, medical student debt is an increasing concern for medical students and graduates, with significant potential to impact the well-being of physicians and their patients. We hypothesised that medical student debt levels would be negatively correlated with mental health and academic performance, and would influence career direction (ie, medical specialty choice). Design We performed a systematic literature review to identify articles that assessed associations between medical student mental health, academic performance, specialty choice and debt. The databases PubMed, Medline, Embase, Scopus and PsycINFO were searched on 12 April

  5. Debt, Cohabitation, and Marriage in Young Adulthood

    Fenaba R. Addo · 2014 · Demography · 193 citations

    Despite growing evidence that debt influences pivotal life events in early and young adulthood, the role of debt in the familial lives of young adults has received relatively little attention. Using data from the NLSY 1997 cohort (N = 6,749) and a discrete-time competing risks hazard model framework, I test whether the transition to first union is influenced by a young adult's credit card and education loan debt above and beyond traditional educational and labor market characteristics. I find that credit card debt is positively associated with cohabitation for men and women, and that women with education loan debt are more likely than women without such debt to delay marriage and transition

  6. What Matters in Student Loan Default: A Review of the Research Literature

    Jacob P. K. Gross, Osman Çekiç, Don Hossler, et al. · 2010 · Journal of Student Financial Aid · 153 citations

    Federal higher education policy has shifted over the past few decades from grants to lloans as the primary means for providing access to postsecondary education for low and moderate-income families. With this shift, policy makers have begun tracking student loan default rates as a key indicator of the efficacy of student loan programs. This effort requires a closer examination of how to define default and what default signifies: What is an acceptable rate of default? What factors contribute to default? Should default rates be used as indicators of institutional quality or loan program efficacy? These questions lead to further investigation of factors influencing default, such as whether defa

  7. Student Loans, Financial Stress, and College Student Retention

    Sonya L. Britt, David Allen Ammerman, Sarah F. Barrett, et al. · 2017 · Journal of Student Financial Aid · 138 citations

    This study examined a sample of 2,475 undergraduate students to determine the influence of financial stress, debt loads, and financial counseling on retention rates. Results indicate, among other findings, that financial stress contributes to an increased likelihood of discontinuing college. Self-reported student loan debt contributes to an increased likelihood of discontinuing college, although students with the highest amount of university-reported student loan debt have a decreased likelihood of discontinuing college one year later as compared to students with no student loan debt. Interestingly, in this study students who sought financial counseling were more likely to discontinue colleg

  8. Student Loan Nudges: Experimental Evidence on Borrowing and Educational Attainment

    Benjamin Marx, Lesley J. Turner · 2019 · American Economic Journal Economic Policy · 131 citations

    We provide the first experimental evidence on the effect of student loans on educational attainment. Loan amounts listed in financial aid award letters (“offers”) do not alter students’ choice sets but significantly affect borrowing. Students randomly receiving a nonzero offer were 40 percent more likely to borrow than those who received a $0 offer. Per additional borrower, loans increased by $4,000, GPA and completed credits increased by 30 percent, and transfers to four-year public colleges increased by 11 percentage points. Cost-benefit and theoretical analyses suggest nonzero offers enhance welfare, yet over five million students are not currently offered loans. (JEL D14, D91, I22, I23)

  9. Black-White Disparity in Student Loan Debt More Than Triples After Graduation

    Judith Scott-Clayton, Jing Li · 2024 · VTechWorks (Virginia Tech) · 124 citations

    The moment they earn their bachelor’s degrees, black college graduates owe $7,400 more on average than their white peers ($23,400 versus $16,000, including non-borrowers in the averages). But over the next few years, the black-white debt gap more than triples to a whopping $25,000. Differences in interest accrual and graduate school borrowing lead to black graduates holding nearly $53,000 in student loan debt four years after graduation—almost twice as much as their white counterparts. While previous work has documented racial disparities in student borrowing, delinquencies, and defaults, in this report we provide new evidence that racial gaps in total debt are far larger than even recent re

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

    E. Velez, Melissa B. Cominole, Alexander Bentz · 2018 · Education Economics · 52 citations

    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, an

  11. Job Search under Debt: Aggregate Implications of Student Loans

    Yan Ji · 2020 · Journal of Monetary Economics · 41 citations

    This paper evaluates the implication of student loan debt on labor market outcomes. I begin by developing a tractable theoretical framework to analytically demonstrate that individuals under the burden of debt tend to search less and end up with lower-paid jobs. I then develop and estimate a quantitative search model with risk-averse agents, on-the-job search, and vacancy creation using NLSY97 data to evaluate the proposed mechanism. My model suggests that, under the standard fixed repayment plan, borrowers’ consumption is reduced due to debt repayment and lower wage income. The latter indirect effect caused by inadequate job search is potentially larger and more persistent than the direct e

  14. Impact of Service-Based Student Loan Repayment Program on the Primary Care Workforce

    Caitlin Davis, Peter Meyers, A. Bazemore, et al. · 2023 · Annals of Family Medicine · 17 citations

    PURPOSE As the average level of medical education indebtedness rises, physicians look to programs such as Public Service Loan Forgiveness (PSLF) and National Health Service Corps (NHSC) to manage debt burden. Both represent service-dependent loan repayment programs, but the requirements and program outcomes diverge, and assessing the relative uptake of each program may help to inform health workforce policy decisions. We sought to describe variation in the composition of repayment program participant groups and measure relative impact on patient access to care. METHODS In this bivariate analysis, we analyzed data from 10,677 respondents to the American Board of Family Medicine’s National Gra

  15. Crushing Debt or Savvy Strategy? Financial Literacy and Student Perceptions of their Student Loan Debt

    Gail Markle · 2019 · Journal of Student Financial Aid · 13 citations

    Almost three quarters of American college students use loans to fund their college education, although according to public discourse student debt is a critical problem. Grounded in social reproduction theory and consumer socialization theory this study examines the influence of financial literacy on students’ college financing decisions, perceptions of student loan debt, and education-related behavior. A sample of 429 undergraduate students selected using systematic cluster sampling from a large public university in the southeast completed a survey containing closed and open ended questions. Participants reported moderate levels of financial literacy (72.3%) and student loan awareness (62.7%

  16. Student Loan Debt: Can Parental College Savings Help?

    William Elliott, Melinda Lewis, Michal Grinstein-Weiss, et al. · 2014 · Canadian Parliamentary Review · 9 citations

    Postsecondary education costs in the United States today are rising with an increasing shift from societal responsibility to individual burden, thereby driving greater student borrowing. Evidence suggests that (i) such student debt may have undesirable educational effects and potentially jeopardize household balance sheets and (ii) student loans may better support educational attainment and economic mobility if accompanied by other, non-repayable financial awards. However, given declines in need-based aid and falling state support for postsecondary costs, policymakers and parents alike have failed to produce a compelling complement to debt-dependent financial aid that is capable of improving

  17. The burden of student loan debt: differences in socioeconomic background and attitudes towards higher education

    Kazuhisa Furuta · 2023 · British Journal of Sociology of Education · 8 citations

    Abstract Increased reliance on student loans to finance higher education (HE) raises concerns about unequal access and repayment burdens. However, who borrows and what motivates students and parents to borrow remain unclear. A longitudinal survey tracked parents and students from high school into their early career to explore the effects of socioeconomic background and attitudes towards HE on taking out student loans in Japan. The findings reveal that, first, families’ economic circumstances are negatively associated with taking out student loans. Second, students, especially those from lower socioeconomic backgrounds, may choose a two-year rather than four-year institution to reduce debt. T

  18. Understanding Loan Use and Debt Burden Among Low-income and Minority Students at a Large Urban Community College

    Maria Luna-Torres, Lyle McKinney, Catherine Horn, et al. · 2018 · Journal of Student Financial Aid · 6 citations

    This study examined a sample of community college students from a diverse, large urban community college system in Texas. To gain a deeper understanding about the effects of background characteristics on student borrowing behaviors and enrollment outcomes, the study employed descriptive statistics and regression techniques to examine two separate samples of students consisting of 1) loan recipients and 2) non-loan recipients. Chen’s heterogeneous research model served as the conceptual framework in the selection of predictors of interest and outcome variables. This study primarily focused on the relationship between borrowing and enrollment outcomes of low-income and racially/ethnically dive

  19. How Much Student Loan Debt Is Too Much?

    Keith Greiner · 1996 · Journal of Student Financial Aid · 6 citations

    Student loan debt may be too burdensome for some college graduates. This paper updates the definition of debt burden based on the perception of borrowers and on federal Department of Housing and Urban Development recommended debt level. The results of a survey of Iowa borrowers suggest that about 74% have manageable debt, while 26% have an excessive debt burden. Nevertheless only about 7% can be expected to default. Those with an excessive debt burden may not be in danger of default because of a variety of available repayment strategies.

  21. The Impact of Student Loan Debt on Civic Engagement: Evidence from the College and Beyond II Dataset

    Osasohan Agbonlahor · 2025 · Education Sciences · 5 citations

    This study examines the relationship between student loan debt and civic engagement among college graduates, with particular attention to differential effects by field of study. Drawing on data from the College and Beyond II dataset, this research analyzes how varying levels of debt burden impact political and community participation among 1673 graduates, including 1059 liberal arts majors and 614 graduates from professional, STEM, and other fields. Employing OLS regression models with multiple measures of debt burden and distinct dimensions of civic engagement, this study finds that both medium and high levels of student loan debt (USD 201–500 monthly and >USD 500 monthly) are associated wi

  23. Graduating During the Great Recession: The Effects of Student Loan Debt on Early Career Labor Market Outcomes and Graduate School Enrollment

    A. Bernasek, Melanie G. Long · 2021 · Journal of Economic Issues · 4 citations

    Abstract: Total U.S. student loan debt has grown substantially, raising concerns about its impacts. Previous work has suggested that indebted graduates pursue higher-wage careers. However, other trade-offs are possible in adverse economic conditions. Graduates may reduce search effort or hold multiple low-wage jobs to enable debt repayment. This article assesses student debt’s impacts on the outcomes of U.S. bachelor’s degree recipients entering the labor market during the 2008 Recession. We find that indebted students graduating into a recession face the repayment burden with wages that are no higher than average and are less or no more likely to enroll in graduate school.

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