Go big or buy a home: The impact of student debt on career and housing choices

Wed, 01 Jan 2025 00:00:00 +0000

Research question and motivation: Folch and Mazzone ask how undergraduate student debt shapes three intertwined post-college decisions — whether to pursue a post-bachelor (graduate) degree, the trajectory of earnings, and whether/when to buy a home. The motivation is the steep rise in student borrowing: between 1993 and 2016 the share of undergraduates who ever borrowed rose from 45% to 68%, and median cumulative borrowing rose from $14,329 to $29,115 (2020 dollars). The puzzle the paper resolves is why debt strongly distorts education and earnings yet has a negligible net effect on home ownership timing.

Luca Mazzone | Macro Paper Warehouse

Go big or buy a home: The impact of student debt on career and housing choices