A college degree trumps student loans

Fascinating survey results from Navient and Ipsos entitled Money Under 35. Worth checking out. The findings destroys the conventional wisdom about college graduates being crushed by student debt.

Obviously recent college graduates would be better of without needing to pay off loans. But the survey demonstrates that having a college degree–particularly a bachelors degree or more––increases full time work and personal income so much to trump the burden of the loans. Consistent with other research, the survey found most who are “crushed” by college loans are those who did not earn a degree.

In an overview of the survey results the Wall Street Journal writes:

The conventional wisdom among student activists and and elected leaders is that high levels of student debt are causing young Americans to delay key milestones like buying a home, getting married and having kids. New research paints a more complicated picture. It suggests student debt is indeed a barrier for a significant minority—college dropouts—but that it’s generally not holding back those who earned degrees.

… The key findings: The likelihood of holding a mortgage, getting married and having children increase with age and educational attainment. And those who took out student debt and earned a degree are far more likely to have done those things than those who borrowed and dropped out. Perhaps more surprisingly, they were more likely to even than some who graduated and didn’t borrow. 

The Journal focused on those between the ages of 25 and 30. For those ages they report that:

Among 25-to-30-year-olds who borrowed for college and earned a bachelor’s or higher, 38% held a mortgage—the highest of any other group. Among those with a bachelor’s or higher who still owed student debt, 35% held a mortgage—the second-highest. The lowest rate? Those who took out student debt but never earned a degree—just 14% had a mortgage. Among all 25-to-30-year-olds, 22% had a mortgage.

The same dynamic was apparent in marriage rates. Again, those who borrowed for college and obtained a bachelor’s or higher had the highest rate of marriage at 60%. The figure was 55% among those who still had student debt and earned a bachelor’s or higher. Dropouts who borrowed for college had the second-lowest rate at 33%.

Finally, there’s the issue of when to have children. Among those who earned a bachelor’s or higher and borrowed for college, 38% had children. Among those who earned such degrees and still had student debt, 33% had kids. By comparison, 34% of college dropouts who took on student debt had children.

The data are clear: the more education attainment the better off one is economically. Yes it would be better if states like Michigan reversed more than a decade of higher education spending cuts and made college more affordable. Yes it would also be better if the federal government helped make college more affordable. But even with student loans at their current levels, if you get a bachelors degree or more, it is for most a very good investment. And no, as these survey results demonstrate, compared to those who did not go to college, having student loans does not make it less likely that you will buy a house, get married or have children.




Print Friendly, PDF & Email

Lou Glazer

Lou Glazer is President and co-founder of Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future’s mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy. Its work is funded by Michigan foundations.

This Post Has One Comment

  1. A student who works part time during college will be able to graduate with less or no debt. And the work experience may help him/her in the job market. It is especially good if a student can get a paid internship during college at a company or in an industry where he/she may want to work after graduation. The work experience can be a valuable enhancement to their college degree.

Leave a Reply

Your email address will not be published. Required fields are marked *