IDEAS home Printed from https://ideas.repec.org/a/eee/cysrev/v70y2016icp8-18.html
   My bibliography  Save this article

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

Author

Listed:
  • Despard, Mathieu R.
  • Perantie, Dana
  • Taylor, Samuel
  • Grinstein-Weiss, Michal
  • Friedline, Terri
  • Raghavan, Ramesh

Abstract

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.

Suggested Citation

  • Despard, Mathieu R. & Perantie, Dana & Taylor, Samuel & Grinstein-Weiss, Michal & Friedline, Terri & Raghavan, Ramesh, 2016. "Student debt and hardship: Evidence from a large sample of low- and moderate-income households," Children and Youth Services Review, Elsevier, vol. 70(C), pages 8-18.
    • Handle: RePEc:eee:cysrev:v:70:y:2016:i:c:p:8-18
    DOI: 10.1016/j.childyouth.2016.09.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0190740916302705
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.childyouth.2016.09.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rong Chen & Stephen L. DesJardins, 2010. "Investigating the Impact of Financial Aid on Student Dropout Risks: Racial and Ethnic Differences," The Journal of Higher Education, Taylor & Francis Journals, vol. 81(2), pages 179-208, March.
    2. Sweet, Elizabeth & Nandi, Arijit & Adam, Emma K. & McDade, Thomas W., 2013. "The high price of debt: Household financial debt and its impact on mental and physical health," Social Science & Medicine, Elsevier, vol. 91(C), pages 94-100.
    3. Elliott, William & Friedline, Terri, 2013. "“You pay your share, we’ll pay our share”: The college cost burden and the role of race, income, and college assets," Economics of Education Review, Elsevier, vol. 33(C), pages 134-153.
    4. Pedro Carneiro & James J. Heckman & Edward J. Vytlacil, 2011. "Estimating Marginal Returns to Education," American Economic Review, American Economic Association, vol. 101(6), pages 2754-2781, October.
    5. Friedline, Terri & Elliott, William & Nam, Ilsung, 2013. "Small-dollar children's saving accounts and children's college outcomes by race," Children and Youth Services Review, Elsevier, vol. 35(3), pages 548-559.
    6. Jesse Bricker & Jeffrey Thompson, 2016. "Does Education Loan Debt Influence Household Financial Distress? An Assessment Using The 2007–2009 Survey Of Consumer Finances Panel," Contemporary Economic Policy, Western Economic Association International, vol. 34(4), pages 660-677, October.
    7. Deborah Cobb-Clark & Tue Gørgens, 2014. "Parents’ economic support of young-adult children: do socioeconomic circumstances matter?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 447-471, April.
    8. Elliott, William & Destin, Mesmin & Friedline, Terri, 2011. "Taking stock of ten years of research on the relationship between assets and children's educational outcomes: Implications for theory, policy and intervention," Children and Youth Services Review, Elsevier, vol. 33(11), pages 2312-2328.
    9. Dee, Thomas S., 2004. "Are there civic returns to education?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1697-1720, August.
    10. Lance Lochner & Todd Stinebrickner & Utky Suleymanoglu, 2013. "The Importance of Financial Resources for Student Loan Repayment," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20137, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    11. David A. Freedman & Richard A. Berk, 2008. "Weighting Regressions by Propensity Scores," Evaluation Review, , vol. 32(4), pages 392-409, August.
    12. William Elliott & Melinda Lewis, 2015. "Student Debt Effects On Financial Well-Being: Research And Policy Implications," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 614-636, September.
    13. repec:hka:wpaper:2013-20 is not listed on IDEAS
    14. Huang, Jin & Guo, Baorong & Kim, Youngmi & Sherraden, Michael, 2010. "Parental income, assets, borrowing constraints and children's post-secondary education," Children and Youth Services Review, Elsevier, vol. 32(4), pages 585-594, April.
    15. William Elliott & IlSung Nam, 2013. "Is student debt jeopardizing the short-term financial health of U.S. households?," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 405-424.
    16. Katharina Best & Jussi Keppo, 2014. "The credits that count: how credit growth and financial aid affect college tuition and fees," Education Economics, Taylor & Francis Journals, vol. 22(6), pages 589-613, December.
    17. Nicolas H�rault & Rezida Zakirova, 2015. "Returns to education: accounting for enrolment and completion effects," Education Economics, Taylor & Francis Journals, vol. 23(1), pages 84-100, February.
    18. Elliott, William & Song, Hyun-a & Nam, Ilsung, 2013. "Small-dollar children's savings accounts and children's college outcomes by income level," Children and Youth Services Review, Elsevier, vol. 35(3), pages 560-571.
    19. Grinstein-Weiss, Michal & Perantie, Dana C. & Taylor, Samuel H. & Guo, Shenyang & Raghavan, Ramesh, 2016. "Racial disparities in education debt burden among low- and moderate-income households," Children and Youth Services Review, Elsevier, vol. 65(C), pages 166-174.
    20. Elliott, William, 2013. "Small-dollar children's savings accounts and children's college outcomes," Children and Youth Services Review, Elsevier, vol. 35(3), pages 572-585.
    21. Meta Brown & Andrew F. Haughwout & Donghoon Lee & Joelle Scally & Wilbert Van der Klaauw, 2014. "Measuring student debt and its performance," Staff Reports 668, Federal Reserve Bank of New York.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jinhee Kim & Swarn Chatterjee, 2019. "Student Loans, Health, and Life Satisfaction of US Households: Evidence from a Panel Study," Journal of Family and Economic Issues, Springer, vol. 40(1), pages 36-50, March.
    2. 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.
    3. Jason Jabbari & Mathieu Despard & Olga Kondratjeva & Brinda Gupta & Michal Grinstein-Weiss, 2023. "Nothing to show for it: Financial Distress and Re-Enrollment Aspirations for those with non-degreed debt," Research in Higher Education, Springer;Association for Institutional Research, vol. 64(1), pages 1-32, February.
    4. Thomas Korankye & Charlene M. Kalenkoski, 2021. "The Effect of Households’ Student Debt on Life Satisfaction," Journal of Family and Economic Issues, Springer, vol. 42(4), pages 757-772, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jinhee Kim & Swarn Chatterjee, 2019. "Student Loans, Health, and Life Satisfaction of US Households: Evidence from a Panel Study," Journal of Family and Economic Issues, Springer, vol. 40(1), pages 36-50, March.
    2. Moreno-Herrero, Dolores & Salas-Velasco, Manuel & Sánchez-Campillo, José, 2018. "Factors that influence the level of financial literacy among young people: The role of parental engagement and students' experiences with money matters," Children and Youth Services Review, Elsevier, vol. 95(C), pages 334-351.
    3. William Elliott & Michal Grinstein-Weiss & Melinda Lewis & IlSung Nam, 2014. "Student Loan Debt: Can Parental College Savings Help?," Review, Federal Reserve Bank of St. Louis, vol. 96(4), pages 331-357.
    4. Elliott, William & Song, Hyun-a & Nam, Ilsung, 2013. "Small-dollar accounts, children's college outcomes, and wilt," Children and Youth Services Review, Elsevier, vol. 35(3), pages 535-547.
    5. Piotr Bialowolski & Dorota Weziak‐Bialowolska, 2021. "Good credit, bad credit: The differential role of the sources of debt in life satisfaction," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(3), pages 967-994, September.
    6. Cheatham, Gregory A. & Smith, Sean J. & Elliott, William & Friedline, Terri, 2013. "Family assets, postsecondary education, and students with disabilities: Building on progress and overcoming challenges," Children and Youth Services Review, Elsevier, vol. 35(7), pages 1078-1086.
    7. Rauscher, Emily & Elliott, William & O'Brien, Megan & Callahan, Jason & Steensma, Joe, 2017. "Examining the relationship between parental educational expectations and a community-based children's savings account program," Children and Youth Services Review, Elsevier, vol. 74(C), pages 96-107.
    8. Elliott, William & Rauscher, Emily & Nam, Ilsung, 2018. "Unequal returns: Intragenerational asset accumulation differs by net worth in early adulthood," Children and Youth Services Review, Elsevier, vol. 85(C), pages 253-263.
    9. Berrak Bahadir & Dora Gicheva, 2022. "Macroeconomic Implications of Student Debt: A State‐Level Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(8), pages 2273-2300, December.
    10. Burlinson, Andrew & Giulietti, Monica & Law, Cherry & Liu, Hui-Hsuan, 2021. "Fuel poverty and financial distress," Energy Economics, Elsevier, vol. 102(C).
    11. Lewis, Melinda & Cramer, Reid & Elliott, William & Sprague, Aleta, 2014. "Policies to promote economic stability, asset building, and child development," Children and Youth Services Review, Elsevier, vol. 36(C), pages 15-21.
    12. Friedline, Terri & Rauscher, Emily & West, Stacia & Phipps, Barbara & Kardash, Nadzeya & Chang, Karin & Ecker-Lyster, Meghan, 2017. "“They will go like I did”: How parents think about college for their young children in the context of rising costs," Children and Youth Services Review, Elsevier, vol. 81(C), pages 340-349.
    13. Laura Schmitz, 2022. "Heterogeneous Effects of After-School Care on Child Development," Discussion Papers of DIW Berlin 2006, DIW Berlin, German Institute for Economic Research.
    14. Chen, Yongjin & Zhi, Kuiyun & Huang, Jin, 2021. "Family Savings and Children’s Non-Cognitive and Cognitive Development: Evidence from China," Children and Youth Services Review, Elsevier, vol. 130(C).
    15. Elliott, William & Sherraden, Michael, 2013. "Assets and educational achievement: Theory and evidence," Economics of Education Review, Elsevier, vol. 33(C), pages 1-7.
    16. Lance Lochner & Alexander Monge-Naranjo, 2014. "Student Loans and Repayment: Theory, Evidence and Policy," Working Papers 2014-40, Federal Reserve Bank of St. Louis.
    17. McMahon, Walter W., 2018. "The total return to higher education: Is there underinvestment for economic growth and development?," The Quarterly Review of Economics and Finance, Elsevier, vol. 70(C), pages 90-111.
    18. 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.
    19. Elliott, William, 2013. "Small-dollar children's savings accounts and children's college outcomes," Children and Youth Services Review, Elsevier, vol. 35(3), pages 572-585.
    20. Friedline, Terri & Elliott, William & Nam, Ilsung, 2013. "Small-dollar children's saving accounts and children's college outcomes by race," Children and Youth Services Review, Elsevier, vol. 35(3), pages 548-559.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:cysrev:v:70:y:2016:i:c:p:8-18. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/childyouth .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.