A study by sociology professor Jason Houle found that students from middle-income families have higher average levels of student debt than their low- and high-income peers. Students just beyond typical financial aid cutoffs are saddled with a disproportionate amount of student loan debt, Houle said.
Young adults from the lower-middle-income bracket reported 59 percent more debt, while the higher-middle-income bracket reported 30 percent more debt than those from the lowest income bracket. Comparatively, students from families earning more than $100,000 reported 240 percent less debt than lower-income students.
He characterized the lower-income bracket as having a family income of less than $40,000, lower-middle-income as $40,000 to $59,000 and higher-middle-income as $60,000 to $99,000.
The study also showed that young adults with at least one college-educated parent have 54 percent less student loan debt than students whose parents did not attend college.
Houle said he was interested in researching this topic because attaining a college degree is “the engine to upward mobility,” and these disparities may restrict the types of decisions young people make upon graduation.
“This is another way that inequalities are reproduced across generations, even amongst those who got a degree,” Houle said.
The difference may arise from the fact that middle-income students are less able to find and receive aid and their parents lack the resources to cover the costs of college. Additionally, lower-income students may be more debt-averse, while middle-income students may be more willing to take out loans.
At Dartmouth, students whose parents have a yearly income of less than $100,000 are not required to pay tuition or loans unless the family is determined to have significant assets, such as home equity. The average amount of aid awarded to undergraduates in the 2012-2013 school year was $43,366, with about 52 percent of students receiving aid, according to the College’s 2013-2014 Common Data Set. The average need-based scholarship and grant award was $40,299, while the average need-based loan was $3,788.
A female member of the Class of 2016 who wished to remain anonymous said that even though her family’s income is around $70,000, she does not qualify for full financial aid. Her family owns additional properties, and home equity values bring her family’s expected contribution to approximately $20,000 per year.
She said the study’s results were unsurprising.
“The definition for ‘lower-income’ is very low, so even if your family is making 60 to 70 thousand dollars per year, without aid it would be very difficult to pay out of pocket,” she said.
Tina Ma ’14 said she does not think there is a significant safety net for middle-class students. As a senior planning to attend medical school, she said debt may affect her future career choice, as some medical school graduates choose their specialties based on expected salaries.
A male member of the Class of 2016 who also wished to remain anonymous said that while the study’s results make sense to him, he does not see an solution for easing middle-class debt. Neither reducing financial aid to lower-income students nor increasing tuition on higher-income students are feasible options, he said.
He added that while the absolute loan amount may be smaller for lower-income students, he felt it was proportionally a greater financial burden for them to afford college. Despite the debt middle-income students owe, he said, they are less likely to pursue work-study opportunities and appear less financially restricted overall.
His own financial situation, however, will continue to affect his decisions at Dartmouth and after graduation.
“I know that I am going to graduate with loans, so it is a reality that I am going to need to work to pay that off,” he said. “For a lot of what I’m doing academically and my plans for post-graduation, I need to keep that in mind.”
