Debt and Graduation from American Universities

Rachel Dwyer
Laura McCloud
Randy Hodson


The goal of "college-for-all" in the United States has been pursued in an environment of rising tuition, stagnant grant aid and already strapped family budgets with the gap filled by college loans. College students are thus facing increasing levels of debt as they seek to develop their human capital and improve their career options. Debt is a useful resource for making needed investments. It is unique as a resource, however, because it must be repaid and can thus also increase vulnerabilities and limit options. We find that lower levels of educational debt do support college completion. However, additional educational debt beyond about $10,000 actually reduces the likelihood of college completion compared to lower levels of debt as the burden of repayment looms. Graduation likelihoods for students from the bottom 75% of the income distribution at public universities are especially influenced by debt. The article considers how the macro-level changes in financing societal functions influence the individual-level risks and vulnerabilities of life in a debt-based society.



In 2009, two-thirds of college graduate had taken on educational debt with the median amount of $15,123 (Lewin 2009). Although student debt can be a useful resource that allows for students' needed investments, effect of debt on college completion is mixed. Educational loans raise number of enrollment, but influence of loans on persistence have to be considered. Dwyer and her colleagues used logistic regression on National Longitudinal Survey of youth 1997 Cohort. The result indicates that students' familial background, types of institution (public or private) as well as amount of debt are significant determinant of graduation likelihood. For students of middle class background, debt up to $10,000 did not have influence in college completion rate, but debt beyond $10,000 undermined the odds of graduation. Dwyer et al. (2012, p. 1150) notes that "the pattern of first positive, then flattening, then negative effects of taking on additional debt indicates mixed support for the ability of debt-financed education." Students in private college, where college communities are relatively smaller, and students from economically privileged background in public universities were found to be resistant to debt.

APA Citation

Dwyer, R. E., McCloud, L., & Hodson, R. (2012). Debt and graduation from American universities. Social Forces, 90(4), 1133-1155.

About the Study

Links to Article
Publication Type Journal Article
In Publication Social Forces
Type of Research Quantitative
Research Design Other
Intervention/Areas of Study Other
Level of Analysis Student-level
Specific Populations Examined Undergraduates
Peer-Reviewed Yes
Specific Institutional Characteristics of Interest Private, Public
Specific Course or Program Characteristics
Outcome Variables of Interest Persistence, Retention
Student Sample Size 500 +
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