Researchers from Washington University in St. Louis’ Center for Social Development and the University of North Carolina at Chapel Hill linked credit bureau records with National Student Clearinghouse data. They used these records to create a measure called "debt-adjusted earnings" that shows how loan payments affect the immediate financial gains of completing postsecondary credentials.
The study finds that degree holders earn on average $8,000 more per year than otherwise similar people who attended college but did not finish. If student loan payments are not counted, the average earnings premium rises to $10,400 per year. The team reports that associate degree holders spend about 9% of extra earnings on loan payments, bachelor's holders 19%, and master's holders 57%.
The authors say higher education remains a worthwhile financial investment and recommend policies to support completion and reduce financial barriers. They also advise considering student loan programs for some non-degree credential programs.
Difficult words
- advantage — A benefit or a favorable condition.advantages
- graduate — A person who has completed a degree.graduates
- tuition — The money paid for college or school.
- debt — Money that is owed to someone.
- potential — The ability to grow or develop.
- policy — A set of rules or guidelines.policies
- advocate — To support or recommend something publicly.
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Discussion questions
- What are your views on student loans?
- How can education be made more accessible?
- What roles do policies play in education?
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