The effect of college loans

In Australia, tens of thousands of university students held protests as outrage spread at sharply increasing costs of higher education. In Switzerland, the European Students’ Union criticised moves to drastically raise tuition fees for foreign students at the Swiss Federal Institutes of Technology. In Australia, tens of thousands of university students held protests as outrage spread at sharply increasing costs of higher education. In Switzerland, the European Students’ Union criticised moves to drastically raise tuition fees for foreign students at the Swiss Federal Institutes of Technology.

The students may have a point. Studies from the U.S.A.. show that college loans and student debts determine people's life choices affecting not just individual lives but also the entire economy, writes the New York Times. For example people with student debts are less likely to start businesses. A new study has found that areas with higher relative growth in student debt show lower growth in the formation of small businesses.

Student loan debt also appears to be impacting home ownership. According to research by the Federal Reserve Bank of New York, fewer 30-year-olds in general have bought homes since the recession, but the decline has been steeper for people with a history of student loan debt and has continued even as the housing market has recovered.

Student loan debt may also affect career choices. Having a college loan appears to reduce the likelihood that people will choose a low-paying public-interest job.

Taken together, the former students choices seem to have a substantial effect on the economy, comments the New York Times.

www.nytimes.com

Barbara Bierach

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