A university degree has long been seen as something of a social equalizer, bestowing its holder with the ability to progress in life and break out of their current circumstances.  Research from Portland State University, unfortunately, suggests that this power is on the wane, not least due to the rising cost of tuition and the debt burden that graduates subsequently have to shoulder.

The researchers examined data from the National Survey of College Graduates to see whether the socioeconomic status of parents was related to the student loan repayment of their children upon graduation.  The analysis revealed that graduates from lower-income families were far more likely to have larger student debt into adulthood than their peers from higher-income families.  This then has a knock-on effect on their ability to save, invest, own a home, and otherwise accumulate wealth.

Debt forgiveness

The findings generally support the concept of student debt forgiveness to help alleviate the financial burden from graduates from lower-income families, but even this could be just a temporary fix.

“Even though we may have one-time student loan forgiveness, new generations will still go to college and considering rising college tuition, they’ll have to borrow more than previous generations and the inequalities will be reproduced over and over again,” the author explains. “The fundamental solution would be to provide more accessible financial aid for college students from lower-income families.”

The debate around student debt cancelation typically has two angles to it.  Opponents suggest that such programs are regressive because of the help they provide to students from privileged backgrounds.  Supporters, however, argue that debt relief would provide significantly more benefits to disadvantaged groups.  The research strongly suggests that the latter argument carries more weight.

With university tuition rising, the amount of debt students are taking on is reaching ever greater proportions, and so the socioeconomic background of families plays a major role in the ability of students to pay off those loans.  This has led to extreme economic distress, especially during turbulent periods such as the Covid pandemic where family finances have often been relied upon to weather the storm.

As such, the power of higher education to promote social mobility is being undermined for students from lower-income families, with their life chances restricted as a result.