The impact of student loans on college access,completion, and returns

Nearly half of all first‐time undergraduates take a loan to pay for college, and many students will borrow tens of thousands of dollars by the time they leave. Low‐income students and students of color borrow student loans more often and in larger amounts, yet attend less selective institutions, are more likely to drop out with debt. Among students who complete college, those with larger amounts of debt may struggle to pay back their loans or to invest in a house, family, or future education. Researchers are just beginning to untangle how the availability and use of student loans affects college access, educational attainment, and life after college, yet this topic has important implications for economic inequality and social stratification. In this article, we summarize what is known and what remains to be investigated, about the impact of student loan availability and use on college enrollment, degree completion, and postcollege outcomes.     

Student debt and hardship: Evidence from a large sample of low- and moderate-income households

Student debt has risen in recent years as higher education costs have shifted to students and their families, particularly those with low-to-moderate incomes (LMI). Though a college degree continues to convey higher earnings, those who finance their degrees have lower net worth and greater financial difficulties than persons without student debt. We assess the relationship between student debt and material and health care hardship among a large sample (n = 5558) of LMI tax filers, using propensity score analysis to adjust for self-selection into student debt status and loan amount and monthly payment quartiles. We find that participants with student debt have a higher likelihood of hardship. Loan amounts only partially predict hardship, and borrowers making current loan payments are at lower odds for hardship than non-payers. We also find that among those with student debt, non-payers and those without college degrees have much greater social and economic disadvantages.     

Racial disparities in education debt burden among low- and moderate-income households

Evidence now demonstrates significant variation in education-debt levels by race and household income, with Black and lower-income students accumulating higher levels of education debt compared to their White and upper-income peers. This study is one of the first to evaluate whether racial disparities in education debt extend to a low- and moderate-income (LMI) population. With data from a national sample of LMI households in the Refund to Savings study (N = 17.684), we employ a two-part modeling approach with a matching-estimator robustness check to estimate racial and ethnic variation in education debt. We find that significant disparities in education debt remain: the odds of student loan indebtedness are twice as high for LMI Black students as for White counterparts. In all, LMI Black students are estimated to incur $7721 more in education debt than LMI Whites, with disparities persisting after graduation. These findings suggest that LMI Black and White students, who face similar liquidity constraints and borrowing risks, are at unequal risk of accumulating education debt. We conclude by discussing the implications of this research for asset-building policies and student loan repayment efforts, both of which offer promise in bolstering college affordability and easing the burden of education debt.     

Financial literacy education: An opportunity for colleges and sociology

Financial literacy represents the knowledge necessary to manage one's financial affairs in a way that contributes to overall wellbeing, yet financial literacy and financial education are understudied in sociology. While emerging adults have low rates of financial literacy overall, this article focuses on college students due to increasing college access and student loan debt. Based on the limited literature that assesses college financial literacy education, it appears that these types of programs may serve to advance college students' financial knowledge. Additional mechanisms that serve to develop college students' financial literacy include parent socialization, banking experience, and high school financial education programs. However, not everyone has the same access to these resources. Thus, given the magnitude of the US student debt crisis and persistent economic inequalities, college financial literacy education may prove beneficial for all students, particularly those from economically vulnerable backgrounds. This article serves as an invitation to sociologists to consider financial literacy education as both a worthwhile pursuit in application and as a research topic.     

Identities and Social-Psychological Well-Being among African American College Students

Abstract

This study investigates African American college students to show the impact of role, social, and personal identities on social-psychological well-being, and compares the relationship between identity processes and academic achievement for black and white college students attending a large, urban, predominantly white public university. The findings confirm that student, ethnic, and personal identities influence self-esteem, self-efficacy, and self-authenticity, but that relationships vary both in direction and strength. Turning to our comparison of black and white college students, the findings do not support claims that black students' self-esteem is less dependent than whites' on getting good grades or that black students' academic identity is less important to their self-esteem than it is for white students.     

Racial Segregation and the Black/White Achievement Gap, 1992 to 2009

In this study, we draw on longitudinal, state‐level data to analyze the impact of four distinct forms of school racial segregation on black/white achievement gaps in math and reading. Pooled time‐series analyses with two‐way fixed effects suggest that increases in black–white dissimilarity and black student isolation contribute to black/white achievement gaps, increases in black–white exposure reduce achievement gaps, and increases in exposure of black students to other minority students have no impact. We conclude by discussing the implications of school racial segregation as a source of academic achievement disparities between black and white students in the contemporary United States.     

The impact of family assets and debt on college graduation

This study examines the influence of family financial assets and debt, both measured during the time of youth's college enrollment, on the chances of college graduation. Data come from the National Longitudinal Survey of Youth. Results from analyses controlling for a number of student, parental, and institutional characteristics indicate that family assets are positively related to the chances of college graduation among White and Black students; family debt is negatively associated with the odds of college graduation among Black students, but neither family assets nor family debt is related to the chances of college graduation among Hispanic students. Overall, results indicate that family assets and debt explain a small portion of racial/ethnic gaps in college graduation. Policy implications are considered.     

The Impact of Student Loan Debt and Student Loan Delinquency on Total,Sex‐, and Age‐specific Suicide Rates during the Great Recession

In 2012, the outstanding student loan balance in the United States surpassed $1 trillion, and between 2005 and 2012, the student loan delinquency rate increased by 77 percent. Simultaneously, by the end of the 2005–2012 time period, the total suicide rate in the United States reached the highest levels in more than a decade. To investigate the recent trends in student loans and suicide, this paper examined the association between state‐level student loan debt, student loan delinquency, and total, age‐, and sex‐specific suicide rates. The study used a hybrid (decompositional) longitudinal regression approach to examine the relationship between student loan debt, delinquency, and suicide rates during the 2005–2012 time period. The results showed student loan delinquency had a positive and significant effect on several of the suicide rates examined within states but had no effect on suicide rates between states net of controls. The results also showed student loan debt had a significant and negative association with suicide for people ages 20–24 and 25–34.     

Examining Racial Differences in the Effects of Substance Abuse on High School Students' Academic Achievement

Abstract

Many studies document racial disparities in the American educational system, finding that white students generally outperform black students. Researchers justifiably focus on structural explanations for such disparities, but generally pay less attention to more proximate influences on academic achievement. However, studies have found that substance use negatively impacts adolescent academic achievement; other findings on race and substance use suggest that this relationship could be more damaging for black students. This paper uses National Education Longitudinal Study data to determine if substance use negatively impacts the academic achievement of high school students, and if black students are more negatively affected than whites. The analysis finds that substance use has a negative impact on academic achievement, even while controlling for a range of known influences on academic achievement. However, this relationship is not found to be more damaging to black students, probably due to white students' higher level of substance use.     

CLASSROOM DIVERSITY AND ACADEMIC OUTCOMES

This paper tests how the race and ethnicity of one's college classmates affect academic performance. Incoming students at a Catholic college are assigned to their first semester, team‐taught, required course. Statistical tests support that this assignment is uncorrelated with a variety of student characteristics. Controlling for team fixed effects and student characteristics, I find evidence of racial peer effects that differ for white students and students of color. White students earn higher grades in classes with more students of color. Students of color with more nonwhite classmates earn lower grades; these effects occur exclusively among those with lower SAT scores. (JEL I21, I28)     

Racial/Ethnic Minority Community College Students' Critical Consciousness and Social Cognitive Career Outcomes

A need exists to better understand how racial/ethnic minority students' critical consciousness development in response to marginalization may be involved in their educational and career development. We therefore examined the link between critical consciousness development and career decision self-efficacy and career outcome expectations among racial/ethnic minority community college students. Following social cognitive career theory's conceptual pillars, we developed a testable model integrating critical consciousness and social cognitive variables. This model was tested with 135 racially and ethnically diverse community college students. Data analysis included path analyses and tests of model fit using structural equation modeling. Results suggested that (a) higher critical agency is linked to higher career decision self-efficacy and outcome expectations and (b) critical action and reflection have a bidirectional link and predict higher critical agency. Implications for research and practice aiming to close educational and career gaps among racial/ethnic minorities are discussed.     

Does Financial Satisfaction Vary Depending on the Funding Strategy Used to Pay for College?

This study sought to determine whether the levels of financial satisfaction reported by college undergraduates and graduates differ in relation to whether they funded their college education by working or borrowing or a combination of the two. Data for this study came from a survey sample of full-time freshmen that formed the basis of a longitudinal study conducted at a large public university. Funding sources examined were grouped into those who worked only, those who borrowed only, those who worked and borrowed, and those who used grants, scholarships, or other sources of money to fund their college education. Compared to those who had student loans, those who had financed college with grants, scholarships, or other money (usually from family and/or friends) were more likely to report greater financial satisfaction than those who had used student loans to pay for college. There was evidence that this was only true during college rather than after college. The results obtained suggest that merely possessing a student loan may not necessarily decrease the level of financial satisfaction as many suspect, especially considering other funding alternatives such as working during college. While there was no significant impact of these funding strategies on financial satisfaction either during or after college, there was evidence for possible thresholds at which overall student loan balances may begin to erode financial satisfaction. The results obtained suggest that student loans may not decrease the level of financial satisfaction as much as many have suspected when compared with working to pay for college, as long as the amount of the student loan is not excessive, and is not accompanied by other types of debt (which also reduced financial satisfaction).

     

Government Student Loan Default: Differences between Graduates of the Liberal Arts and Applied Fields in Canadian Colleges and Universities

Les programmes de prêts étudiants du gouvernement sont de plus en plus disponibles pour permettre aux étudiants de familles défavorisées un meilleur accès à l'éducation. En revanche, il est inquiétant d'observer des niveaux d'endettement élevés chez les étudiants et les difficultés qu'ont certains à rembourser ces dettes. Dans cette étude, des données de l'Enquête Nationale auprès des Diplômes 2005 (END) de Statistiques Canada sont analysées dans le but d'établir des liens entre les domaines d'étude et le non‐remboursement des dettes sur les prêts étudiants du gouvernement pour un échantillon de diplômés des collèges et universités. Les analyses prennent en compte les effets de facteurs alternatifs liés au statu socio‐économique et aux revenus. Les résultats démontrent que le niveau d'éducation (collégial versus universitaire) et les domaines d'étude sont des déterminants importants du risque de non‐remboursement des dettes sur les prêts étudiants deux ans après l'obtention du diplôme. De plus, ces résultats sont stables en tenant compte des différences de revenus. Government student loan programs have become increasingly available to provide opportunities and upward mobility for students of disadvantaged backgrounds. Rising student debt and its impact on the repayment experiences of recent postsecondary graduates has become an important concern. This study employs data from Statistics Canada's 2005 National Graduates Survey to examine the relationship between field of study and loan default on government‐supported student loans for graduates of community college and baccalaureate‐level university programs when controlling for many factors relating to sociodemographic characteristics and earnings. Overall, both level of schooling (college versus university) and field of study are significant predictors of whether graduates report defaulting on their government student loans within two years of graduation. However, these findings are relatively unrelated to earnings.     

Student commitment and purpose in a private secondary school

Research on public education often concludes that low achievement is partly caused by a lack of student commitment to an educational goal. This study investigates the sense of academic purpose among students in a private secondary school where all graduates go to college, and explores the mechanisms of student commitment built into the social organization of the school. Results show that educational commitment among students develops from intensive face-to-face interaction in a primary community, the sense of history and tradition resulting from continuity in students' educational experiences, and the substantial power students have over their own school lives. These results add qualitative information to the debate over differences between public and private education, and suggest ways to improve public schools.     

Attitudes Toward Lesbian,Gay, and Bisexual College Students: The Contribution of Pluralistic Ignorance,Dynamic Social Impact,and Contact Theories

Abstract

Social psychology theories may be useful in developing new interventions to reduce prejudice against lesbian, gay, and bisexual (LGB) college students. For this preliminary study, the authors surveyed 109 college dormitory residents to determine their personal comfort with LGB students and their perceptions of other students' comfort with these individuals. They found widespread evidence of pluralistic ignorance—the students rated themselves as significantly less anti-gay than either their friends or the typical student. Students' attitudes showed geographic clustering, with the building of residence a significant predictor of students' attitudes. Finally, consistent with the contact hypothesis, the perception that 1 or 2 LGB students lived on the same floor or in the same building was associated with more positive attitudes.     

Educational background,high school stress,and academic success

This research considers whether students without college-educated parents encounter more stressful life events, and if this exposure influences high school academic success, college matriculation and college degree attainment. Analyses were performed on 7989 students between 1988 and 2000 from NELS:88/2000. Findings suggest that students without college-educated parents encounter more stressful life events. This difference did not account for group differences in outcomes. However, exposure to certain stressors affects high school success over the entire sample. These stressors tend to be beyond student control. In addition, total life events in high school relates to students' ability to finish a college degree over the entire sample. This research extends current knowledge by considering stress' impact on student growth, academic trajectory and retention.     

PERSPECTIVES OF INTERRACIAL DATING AT A PREDOMINANTLY WHITE UNIVERSITY

This study examined the viewpoints and experiences of college students with regard to interracial dating. Thirty-five black students and 35 white students in attendance at a predominantly white university participated in face-to-face interviews. Black men and white women expressed more favorable attitudes toward interracial dating compared with black women and white men. Some white females downplayed the significance of interracial relationships, going so far as to suggest it is a nonissue, apparently unaware that it is an issue of concern to many students, especially black females. The concept of white privilege is discussed as an explanation for white students' perspectives. Students who dated interracially faced social consequences, including negative reactions from peers and family members. Findings reveal that the dating landscape differs for students based on their race and gender. In particular, the dating pool appears to be limited for black females at the institution under study.     

SCHOOL RACIAL COMPOSITION AND BIRACIAL ADOLESCENTS' SCHOOL ATTACHMENT

Despite extensive research on multiracial youth in recent years, to date, no empirical studies have analyzed how racial context may affect biracial adolescents' sense of belonging in a social institution beyond families. In this study, we examine how the racial makeup of the student body affects self-identified biracial adolescents' school attachment. Using data from the National Longitudinal Study of Adolescent Health, we find that the proportions of white or black students in school significantly affect the school attachment of Hispanic/black, Asian/black, and American Indian/black biracial adolescents, but school racial composition in general has little influence on biracial adolescents with a partial-white identification (i.e., black/white, Hispanic/white, Asian/white, and American Indian/white). Our analyses also show that on average, students of most biracial groups display lower school attachment than their corresponding monoracial groups, but the differences from the monoracial groups with the lower school attachment are generally small. We discuss the implications of our findings for biracial adolescents' perceived racial boundaries and contemporary American race relations.     

LIFE AFTER DEBT: POSTGRADUATION CONSEQUENCES OF FEDERAL STUDENT LOANS

We estimate the causal effect of student loans on postgraduation labor market outcomes exploiting a kink in the formula determining eligibility for need‐based student loans. Using a representative sample of students graduating with a bachelor's degree in 1993, we find that student debt has nonnegative effects on earnings. This result holds with differing levels of statistical significance across a battery of different empirical designs: (1) ordinary least squares, (2) partially linear, and (3) regression kink. We find similar results for the 2008 graduating cohort. (JEL I22, I26, J32, J33)     

“They will go like I did”: How parents think about college for their young children in the context of rising costs

Rising college costs and student loan burdens have triggered national debates about whether a college degree is “worth it.” Parents raising children in the midst of these debates may be evaluating the value of a college degree relative to its costs and adjusting their educational expectations for their children, shaping future generations' socialization toward college. In this context, it is unclear how theoretical models on college attendance decision-making perform in explaining parents' thoughts about college for their children. This qualitative study elicited early perspectives on college through in-depth interviews with 37 parents of kindergarten children from one school district in a mid-sized, Midwestern city. Almost unanimously, lower-income parents with some college education saw a college degree as a catalyst of their children's upward mobility, though very few thought they could help their children afford college. Higher-income parents more often expressed doubts about pursuing a college degree or the value of that degree acquired with debt.