Student Loan Programs and the Realities of Student Debt

Baum, Sandy

doi:10.1057/978-1-137-52738-7_2

Cited by 15 publications

(15 citation statements)

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“…Although most public and academic attention to mounting education debt focuses on undergraduate students, some argue that concerns about undergraduate debt are overstated (Akers and Chingos 2016; Elvery 2017; Looney and Yannelis 2015; Pyne and Grodsky 2018). Contrary to the narrative in mainstream media, many borrowers at risk of default hold modest amounts of debt but failed to complete their degrees, complicating repayment, or chose to attend high-cost, low-aid schools (Baum 2016; Valentine and Grodsky 2015). Recent evidence, however, indicates an increasing share of student loan debt is accruing at the graduate degree level, with graduate degree-holders accounting for as much as 40 percent of the trillion-dollar figure (Delisle 2014; Looney and Yannelis 2015).…”

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confidence: 99%

Inequality and Opportunity in a Perfect Storm of Graduate Student Debt

Pyne

Grodsky

2019

Sociol Educ

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Recent efforts to understand aggregate student loan debt have shifted the focus away from undergraduate borrowing and toward dramatically rising debt among graduate and professional students. We suggest educational debt plays a key role in social stratification by either deterring bachelor’s degree holders from disadvantaged and underrepresented backgrounds from pursuing lucrative careers through advanced degree programs or imposing a high cost for entry. We speculate that the ongoing personal financing of advanced degrees, changes to funding in higher education, and increasing returns to and demand for postbaccalaureate degrees have created a perfect storm for those seeking degrees beyond college. We find that aggregate increases in borrowing among advanced degree students between 1996 and 2016 can be explained in part by increasing enrollment rates, particularly among master’s degree students, and large, secular increases in graduate and professional students’ undergraduate and graduate borrowing. In contrast to undergraduate debt alone, the burden of educational debt among graduate borrowers appears to have fallen on students from lower socioeconomic backgrounds and historically underserved students of color more so than their more advantaged counterparts and on women more so than men. However, we also find that median advanced degree wage premia over those of bachelor’s degree holders are substantial for many who graduate with advanced degrees but are particularly high for African American and low socioeconomic status graduates, complicating simple conclusions about the stratification of debt at the postgraduate level.

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confidence: 99%

Inequality and Opportunity in a Perfect Storm of Graduate Student Debt

Pyne

Grodsky

2019

Sociol Educ

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“…Student debt must be understood as a symptom of a broader problem in college costs and prices. Simply banning student borrowing without dealing with the underlying problems of prices could have unintended consequences (Baum 2016). While our results are not conclusive, the preponderance of our evidence suggests that borrowing among community college students is associated with lower levels of completion, particularly during early years of postsecondary education and among students who may not have intended to borrow in the first place.…”

Section: Resultsmentioning

confidence: 99%

“…Student debt has become a key issue in national and state debates on higher education (Hershbein and Hollenbeck 2015). This debt has risen primarily as a function of the increasing price of higher education, coupled with an inability of state, federal, or institutional student aid to keep pace with these increasing prices (Baum 2016). In this work, we are less concerned with the overall increase in debt and the reasons for this increase and more concerned with the implications of increasing debt for community college students.…”

Section: Background and Related Studiesmentioning

confidence: 99%

Impact of Community College Student Debt Levels on Credit Accumulation

Baker¹,

Doyle²

2017

The ANNALS of the American Academy of Political and Social Scie

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Most community college students do not borrow to pay for their education. However, in recent years more students are borrowing and, when they borrow, accumulating large amounts of debt. To help clarify whether increased debt burdens are aiding community college students or harming them, we explore the impact of borrowing on academic credit hour accumulation. Using data from the Education Longitudinal Study 2002–2012, we provide multiple estimates of the impact of borrowing on credit hour attainment among community college students. Standard estimates suggest that community college students who borrow complete fewer credit hours than students who do not borrow, although the influence is relatively small (about two credits two years after enrollment). Instrumental variables estimates suggest that the impact of borrowing on credits attained is not significant two years after enrollment but is substantial eight years after enrollment (allowing students multiple enrollment spells).

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“…Using student loans to finance one’s postsecondary education also has potential negative implications. Among students who graduate with a degree, many report delaying buying a house (40%), buying a car (31%), having children (22%), moving out of their parents’ house (21%), and getting married (15%) due to educational loans (Baum & Saunders, 1998). Gladieux and Perna (2005) found that the negative ramifications of educational debt are particularly high for the approximately 20% of student borrowers who drop out without earning a degree.…”

Section: Theory and Literature On Loan Aversionmentioning

confidence: 99%

Understanding Loan Aversion in Education

2017

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As the college-going population becomes increasingly diverse and the cost of college continues to rise, it is critical that we better understand the underlying mechanisms by which prospective students make decisions about whether and how to finance their education beyond high school. Student loans are an increasingly necessary tool to help students pay for postsecondary education. Though 35% of all undergraduate students and 55% of all graduate students receive some type of federal loan to help finance their postsecondary education (Snyder & Dillow, 2015), there appears to be a subset of students who are averse to taking out loans and, thus, will choose not to borrow money to finance their college education (Callendar & Jackson, 2005; Cunningham & Santiago, 2008). Loan aversion, as it applies to postsecondary education, is generally defined as "an unwillingness to take a loan to pay for college, even when that loan would likely offer a positive long-term return" (Cunningham & Santiago, 2008, p. 10). Loan-averse students are those interested in investing in higher education but not willing to take out loans to do so (Palameta & Voyer, 2010). Although a handful of studies have provided initial evidence that loan aversion may affect students' decisions about investing in college, this study further tests the hypothesis that loan aversion exists and is widespread in the United States among current and prospective college students. Evidence of the existence of loan aversion has been found among students in various contexts (

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Student Loan Programs and the Realities of Student Debt

Cited by 15 publications

References 0 publications

Inequality and Opportunity in a Perfect Storm of Graduate Student Debt

Inequality and Opportunity in a Perfect Storm of Graduate Student Debt

Impact of Community College Student Debt Levels on Credit Accumulation

Understanding Loan Aversion in Education

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