Education loans and asset building among black and Hispanic young adults

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Authors: Min Zhan and Xiaoling Xiang
Date: Aug. 2018
Publisher: Elsevier B.V.
Document Type: Article
Length: 310 words

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Abstract :

To access, purchase, authenticate, or subscribe to the full-text of this article, please visit this link: http://dx.doi.org/10.1016/j.childyouth.2018.06.006 Byline: Min Zhan [mzhan@illinois.edu] (a,*), Xiaoling Xiang (b) Highlights * Having education loans upon leaving college was negatively associated with net worth among black and Hispanic young adults. * Having education loans was negatively associated with non-financial assets among black and Hispanic young adults. * Amount of education loans was not associated with measures of asset accumulation among black and Hispanic young adults. * Years of education are positively related to measures of asset accumulation among black and Hispanic young adults. Abstract Use of education loans as a way to finance college education has grown rapidly, with minority students and their families being particularly burdened with education loan debt. Given the rising education loans and the racial/ethnic disparity in wealth accumulation, it is timely and important to examine how education loans affect the ability of future wealth building among minority households. This study examines the association between education loans and financial asset building among Black and Hispanic young adults aged 30 years by analyzing data from the 1997 National Longitudinal Survey of Youth. The results from a treatment--effects model indicate that having education loans is negatively related to net worth and nonfinancial assets at age 30, after controlling for respondents' demographic characteristics, years of education, and working hours. The relationship between the amount of education loans and indicators of financial balance sheets, however, is not statistically significant among the Black and Hispanic young adults with outstanding loans. Author Affiliation: (a) School of Social Work, University of Illinois at Urbana-Champaign 1010, West Nevada Street Urbana, IL 61801, United States (b) School of Social Work, University of Michigan, 1080 S University Ave, Ann Arbor, MI 48109, United States * Corresponding author. Article History: Received 25 February 2018; Revised 3 June 2018; Accepted 4 June 2018

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Gale Document Number: GALE|A550364224