Higher Education: Examining the Long-Term Financial Effects of Student Debt

Barrett, Brett

Higher Education: Examining the Long-Term Financial Effects of Student Debt

Persistent URL

http://hdl.handle.net/10456/42896

Author(s)

Barrett, Brett

Date Issued

April 7, 2017

Abstract

The objective of this study, with both theoretical and empirical analysis is to inspect the effect of student debt on a household, using the four main indicators of financial health. These indicators are; 1. Asset accumulation, 2. Net worth, 3. Retirement accounts, and 4. Total vehicle and home and values. This study continues work done by the Federal Reserve's Survey of Consumer Finances, in which they were able to find some correlation between education debt and the aforementioned indicators. Using the data taken form these surveys, the empirical results suggest that any level of student debt will negatively influence all four of these indicators. Across all four regressions conducted, the correlation between student loans and these signals of financial health were all statistically significant. Furthermore, these results can be used to explain a wide variety of demographic variables and there effects on these indicators as well.

Major

Economics

First Reader(s)

Ormiston, Russell A.