This paper measures the effects of undergraduate student loan debt on
graduates’ post-college outcomes: employment, additional enrollment,
family formation, home ownership, and net worth. The analysis uses data
from a nationally representative sample of 2007–08 bachelor’s degree
recipients. Because a graduate’s debt burden is not randomly assigned,
we use an instrumental variable – enrollment-weighted average in-state
tuition over four years – to estimate the effect of debt on postbaccalaureate
outcomes while minimizing selection bias. We find that
four years after graduating, undergraduate debt is related to borrowers’
earnings, job choice, decisions to marry and have children, and net worth.
