Graduation in an Era of Uncertainty: Student Loan Repayment Following the Great Recession
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Date
2017-05
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The Ohio State University
Abstract
Many students have financed educational aspirations through burdening themselves with debt-a result of interplaying dynamics of finance, education, and the labor market, a financing strategy for higher education especially prevalent during and following the American Great Recession. By the time students graduated and entered a ravished employment landscape, many had educational experiences that were other than traditional. In order to attain a bachelor’s degree, some began at community colleges or for-profit institutions, others had transferred, and many had taken longer than expected. This interaction between the financial crisis and higher education had considerable consequences for students as the rise in student debt was accompanied by a rising trend of repayment distress. In the slow recovery following the recession, have some students been able to manage their educational debt better than others? In my thesis, I examine debt repayment patterns in a post-recession era persistently marked with uncertainty. I draw from the nationally representative Baccalaureate & Beyond 2007-08 survey conducted by the U.S. National Center for Education Statistics. Corroborating past research, this sample suggests that some students are more successful in loan repayment: those who come from an economically privileged class and those who began college at public and private not-for-profit four-year institutions. I find that many students who began at two-year institutions and for-profit school had taken on more debt to finance what was supposed to be cheaper education and graduated with substantially higher debt loads and weaker labor outcomes than their peers. This suggests that institution type first enrolled plays a role on student outcomes and ultimately loan repayment. The interplay of where a student begins college and post-baccalaureate labor market outcomes have become increasingly important in understanding social stratification: college has been regarded as an equalizer among demographic and economic groups; however, it may instead further replicate disadvantages.
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Keywords
higher education, debt, Great Recession, student loan, repayment, default