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Unequal Outcomes: Student Loan Effects on Young Adults' Net Worth Accumulation

Lewis, Melinda
College Debt
Publication type: 

Most people do not dream of going to college and becoming rich; that is, higher education is, for most, a path to the American Dream of middle-class financial security and upward mobility, not a perceived ticket to great riches. Generally, when people dream of being rich, they think of being a professional athlete, an actor, a singer, or entrepreneur, or winning the lottery. People may dream of getting rich, but it is not this illusion of quick fortune that animates individual actions nor characterizes the American ideal. Instead, Americans expect and work toward the opportunity to become middle-class through education, and it is this promise that underscores our vision of ourselves and our presumed ‘contract’ with the institutions that govern U.S. society. In recognition of the role that educational attainment plays in opening the door to this archetypal middle-class ideal, U.S. policy decided some time ago that children’s work would be school work. Children and their parents believe that the reward for innate intellectual ability and expended academic effort will be a chance to reach, not ease and opulence, but security and upward progress. U.S. policy affirms that education is the primary path for achieving the American Dream. Therefore, quick climbs from rags to riches are presumed to be quixotic, fleeting, and not necessarily even desirable. In contrast, the denial of a fair shot to enter and stay in the middle class through education imperils the foundation on which our collective identity rests and threatens to rewrite the American narrative of ‘success’ through effort and ability, mediated through attainment of education. 

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Elliott, W., Lewis, M., Johnson, P. (2014). Unequal outcomes: Student loan effects on young adults’ net worth accumulation. Lawrence, KS: Assets and Education Initiative (AEDI).

New Book Released

Today’s student loan system is in place because of a political compromise, and growing discontent with student debt may signal that this arrangement has run its course. While there are resources and organizations in place to help those struggling with debt, the time has come to consider a new direction for financial aid, William Elliott III and Melinda Lewis argue in “Student Debt: A Reference Handbook.”

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