Despite rising prices, demand for a college education has increased. According to the Consumer Expenditure Survey (CE), 74 percent of single person, young adult (aged 25 to 34) consumer units (similar to households) were college educated in 1993-94, compared to 80 percent in 2013-14. While some of these students were able to finance their education using savings, scholarships, or other means, others had to borrow at least some of the amount, and continued to owe several years after graduation. The burden of this debt has consequences for other facets of their lives, such as the ability to purchase a first home or vehicle, to travel, or even to purchase basic goods and services, such as apparel.
In addition to detailed expenditure, demographic, and income information, the CE collects data on assets and liabilities. Formerly included in other loans, since 2013, the CE collects student loan debt separately. From CE microdata, single young adults aged 25 to 34 who have at least some college experience, and who are not currently in college, are selected. This sample is divided into those with and those without student loan debt. Within the two subsamples, income, expenditures, assets, and liabilities other than student loan debt, such as credit card balances, are compared.
Preliminary findings show strong evidence of returns to education: Income before taxes for the sample just described is about $19,000 higher than for similar single young adults who do not have any college education. However, within the college-educated group, these differences are less pronounced. Those with and without debt have about the same income, and remarkably similar spending patterns. Nevertheless, those with debt are less likely to own their homes than those without debt, and to have lower levels of liquid asset accumulation when reported values in different asset categories (retirement accounts; checking, savings, money market accounts, and certificates of deposit; and directly-held stocks, bonds and mutual funds) are compared.