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Student Debt Burden Impacted by Job Choice, Family Formation [Report]

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Four years after graduation, employment and family formation play a decisive role in the burden of loans taken by students to fund their education, according to a new study by nonprofit research institute RTI International.

Researchers Erin Dunlop Velez and Melissa Cominole have found that graduates earn an additional 5 percent for every $5,000 borrowed during under graduation. The study also found that graduates were likely to see a 7 percent of their net worth being negative.

“It is important that students have information about how student loan debt may continue to affect them, even after they exit postsecondary education,” author Velez said. “Students need to be able to make informed borrowing decisions and understanding how the amount they owe could impact other areas of their lives is an important part of that.”

The report, compiled on the basis of data from the National Center for Education Statistics’ 2008/2012 Baccalaureate and Beyond Longitudinal Study, showed the difference in effects on the family formation and employment by gender and dependency status.

“The findings indicate that graduates are making decisions that they would not have made otherwise, had they had less debt. For example, while students are choosing higher-paying jobs today to be able to afford their loan payments, they may be compromising on other factors such as benefits or flexible work hours,” reads the report.

The researchers didn’t find a connection between debt and outcomes, like the number of hours worked, the decision to enroll in additional schooling.

$1.5 Trillion Student Loan Debt is a Crippling Burden for Millions of Americans

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