Over the past 15 years, the number of student loan recipients has increased by 51 percent and the debt associated with those loans has more than doubled.1 More Americans are borrowing more money to go to college.
We asked alumni nationwide who had borrowed money to go to school if their loans were worth it. Strada Education Network and Gallup surveyed a nationally representative sample of more than 6,000 student loan holders. While perspectives on student loans vary with the financial factors of loan amount and income, there are also differences by race or ethnicity and education pathway. Yet one variable clearly topped the list: whether alumni felt their school provided them with resources and support to get a good job. When this support is present, alumni are much more likely to feel their student loans were worth it, and the differences in perceived value among racial and ethnic groups diminish. Learn about the detailed results below.
Half of alumni feel it was worth taking out student loans. Non-completers are least likely to feel student debt was worth it, compared to 58 percent of bachelor’s degree holders and 63 percent of those with graduate degrees.
Fewer than 4 in 10 Black alumni and less than half of Latino alumni feel that it was worth taking out their student loans, in contrast to majorities of white and Asian alumni who feel their loans were worth it. Even holding loan amount, income, and attainment level equal, Black and Latino alumni are much less likely to feel it was worth taking out student loans.
When students felt that their school provided them with resources and support to get a good job, they were eight times more likely to believe that it was worth taking out student loans. Holding other factors equal, when support for getting a good job is strong, Black alumni are just as likely as white alumni to believe it was worth taking out student loans.
Only half of all alumni felt it was worth taking out student loans to finance their education. Another 20 percent neither agreed nor disagreed, and 30 percent disagreed.
We might expect that alumni who had taken out larger loans or who were earning less money would feel more negatively about their student loans. Yet these connections were not quite so straightforward. To a certain extent, larger loan amounts were linked with negative perceptions about loans, but alumni with the largest loans (more than $75,000) were more likely than alumni with loans between $50,000 and $75,000 to say their loans were worth it. This may be because the largest loans were taken out for expensive graduate programs with strong career path returns, such as medical school.
Likewise, the relationship between income and feelings about student loans is nuanced. Those with the highest personal income are most likely to feel their loans were worthwhile, but those with low incomes are also more likely than alumni in the middle income range to feel positively about their student loans. It could be that in this case, alumni with very low incomes may have support from a spouse or partner that allows them to choose to work part-time or in satisfying careers that pay less money.
Ability to pay back student loans appears to be tied to both completion level and race. Students who do not complete a degree are far more likely to default on their loans, and associate degree completers are more likely to default than bachelor’s degree completers. Yet even at the same attainment levels, Black borrowers, who face racial disparities in wages and wealth accumulation, are more likely than white borrowers to default on their loans.2 A similar pattern holds in terms of alumni perspectives on student loans: stop-outs and Black and Latino borrowers are less likely to feel it was worth taking out student loans.
What explains these differences in perceptions among racial and ethnic groups? In order to pull apart whether other factors could be accounting for the more negative perspective on student loans from Black and Latino borrowers, we ran a regression model to control for differences in income, loan amount, and completion rates. We found that even after controlling for all of these variables, Black and Latino borrowers still had a lower probability of feeling their loans were worth it.
Prior Strada research has shown that when students feel their school helps them connect their education to a career, they are far more likely to believe their education will be worth the cost. The same pattern holds true for alumni feelings about student loans. Alumni who feel their school provided them with resources and support to get a good job are eight times more likely to feel their student loans were worth the cost compared to alumni who didn’t feel their school provided this support.
When student support for getting a good job is incorporated into a statistical model with the other variables considered earlier, the connection to positive feelings about student loans remains strong. Moreover, when support for getting a good job is strong, differences in perspectives by race disappear: Black borrowers who believe they had strong support are just as likely as white borrowers to believe it was worth taking out student loans. Along with other efforts to address racial and ethnic disparities in income, wealth, and college completion, this research points to a promising solution that can help all students and close equity gaps.
Logit model of predicted probability that students agree taking out a student loan was worth it. Variables included: loan amount, personal income (log), attainment level, race/ethnicity, support, and interaction between race/ethnicity and support.
The scale and pace of the increase in U.S. student debt levels has made borrowing for college a top concern for policymakers and the general public. Affordability challenges, particularly when coupled with rising doubts about the value of a postsecondary education, pose a serious threat to college access.
However, alumni themselves point us to a key factor tied to their beliefs about the value of student loans. When they feel their school provided them with support and resources to get a good job, they are much more likely to feel it was worth borrowing money to get more education after high school. This support to get a good job even closes gaps in perceptions of loans across racial and ethnic lines. We have repeatedly found that postsecondary experiences, policies and practices that connect education to have the strongest ties to perceptions of the value of education.
Results for the Strada-Gallup Education Consumer Survey are based on web surveys conducted from April 2 to June 2, 2020, and Oct. 1 to Dec. 22, 2020, with a random sample of adults ages 18 to 65, living in all 50 states and Washington, D.C. For the national survey, there were 10,361 responses in the spring wave and 3,478 responses in the fall wave. Gallup randomly selected individuals to participate in the study using an address-based sample frame. Respondents had the opportunity to respond to the survey via web or mail. Surveys were conducted in English and Spanish.
Samples were weighted to correct for unequal selection probability and nonresponse. Demographic weighting targets are based on the 2018 American Community Survey figures for the ages 18 to 65 population. The data were weighted to match national demographics of age, education, gender, race, ethnicity, region, labor force participation, and population density.
All reported margins of sampling error for the study include the computed design effects for weighting.
For results based on the total sample of 6,739 alumni who had enrolled in college and taken out student loans, the error range is ±3.7 percentage points.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
* Statistically significant difference at p<.05
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