The Ambiguous Effects of Undergraduate Debt: Extending the Human Capital Model of Graduate School Enrollment

Abstract

The study explores the acquisition of undergraduate debt and estimates the influence of this debt on graduate school enrollment. By expanding the traditional human capital frameworks utilized in existing models, the study estimates whether and to what degree undergraduate loans and graduate school enrollment are influenced by cultural capital constructs approximating the accessibility of educational and financial information. Using a national, secondary dataset (Baccalaureate and Beyond: 93⁄03), the study estimates the influence of these constructs and specific student background and institutional factors.

The amount of loans acquired by college graduation is explored through a blocked, stepwise multiple regression model. The model is significant, but the strength of association between amount of loans and the set of predictors is modest. College-level factors produce the greatest improvements in the model's explanatory power. Variables representing cultural capital are meaningful predictors only when interacting with other factors.

The probability of graduate school enrollment is evaluated using a blocked, stepwise logistic regression model. Though significant, the strength of the association, again, is moderate. Loan-taking is not a significant predictor of graduate school enrollment by itself, but its interactions with other factors produce varying associations with enrollment. Ultimately, college major and GPA have the most dramatic effects on graduate school enrollment. Based on these findings, the study presents suggestions for future research and recommendations for education policy.