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

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  • Erin Velez
  • Melissa Cominole
  • Alexander Bentz

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.

Suggested Citation

  • Erin Velez & Melissa Cominole & Alexander Bentz, 2019. "Debt burden after college: the effect of student loan debt on graduates’ employment, additional schooling, family formation, and home ownership," Education Economics, Taylor & Francis Journals, vol. 27(2), pages 186-206, March.
    • Handle: RePEc:taf:edecon:v:27:y:2019:i:2:p:186-206
    DOI: 10.1080/09645292.2018.1541167
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    Cited by:

    1. Robin Henager & Sophia T. Anong & Joyce Serido & Soyeon Shim, 2021. "Does Financial Satisfaction Vary Depending on the Funding Strategy Used to Pay for College?," Journal of Family and Economic Issues, Springer, vol. 42(3), pages 429-448, September.
    2. Baird Matthew D. & Zaber Melanie A. & Bozick Robert, 2022. "Beyond traditional academic degrees: The labor market returns to occupational credentials in the United States," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 11(1), pages 1-38, January.

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