Students with around $US10,000 in debt are more likely to graduate from college than those with no debt, according to a new study from the Third Way think tank.
The study was conducted by Ohio State University sociology professor Rachel Dwyer, who found similar results in a 2012 study. In the newer report, the Wall Street Journal notes, $US10,000 in student debt was associated with a 67% graduation rate — higher than any other debt amount.
“A modest amount of student debt increases graduation rates across the board, but particularly for low- and middle-income students and at public universities,” Third Way’s senior vice president for policy, Jim Kessler, told the Journal. “A modest amount of debt shows there’s skin in the game. It invests you into the outcome.”
In both studies, graduation rates dropped as students took on more than $US10,000 in debt. Dwyer emphasised that, for her, the major takeaway from the studies is that “graduation rates decline after students acquire a certain level of debt,” according to the Journal.
Here’s how the probability of graduating with a four-year degree changes across student loan levels, via the Third Way study:
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