The link between student debt and divorced parents

Nicole M. King
10 March 2014
Reproduced with Permission
Family Edge

The News Story - Student loans are ruining your life. Now they're ruining the economy, too.

With graduation around the corner for the class of 2014, many students are beginning to ponder what kind of job will pay off their mountain of debt. And well they should. TIME reported last week that the average amount of student debt for the class of 2012 was $29,400. Over the past ten years, the amount of student debt nationwide has grown from an already staggering $253 billion to a suffocating $1.08 trillion - a 300% increase.

The problem, of course, is that debt keeps America's young graduates from pursuing life as they otherwise might. In an economy driven by consumer spending, more cost-conscious young Americans spells troubled times ahead. And whereas student debt used to make it easier for college graduates to qualify for a mortgage, as it generally meant a higher-paying job, lenders now are increasingly wary of large amounts of debt.

The TIME story cited many factors for the increase in debt, including the rising cost of higher education coupled with stagnant wage growth. But another, little-cited cause may run even deeper.

The New Research - The best college - aid program

The rising cost of a college education, coupled with the federal government's eagerness to expand levels of student loans allegedly to make higher education more affordable, means that the average senior graduates with not only a degree but also a huge amount of debt. These numbers get a lot of press, but almost no attention has been directed to a major cause of student debt: having divorced or remarried parents.

According to a study by sociologists at Rice University, collegians whose parents are not married to each other face significantly heavier financial burdens for the simple reason that married parents, relative to other parents, contribute significantly more to their children's college education. Looking at data from the National Postsecondary Student Aid Survey, Ruth N. López Turley and Matthew Demond compared the financial contribution of parents by marital status to their children's education using a sample of 2,400 undergraduates during the 1995-96 academic year. These older data were mined because they were the most recent data that included parental interviews reporting their financial contributions toward their children's education. In every measure - and in descriptive analyses as well as in multivariate regressions that controlled for factors that might explain the parental marital - status difference - the researchers found that marital status was the most significant and consistent determinant of the amount of money parents contribute toward their children's college expenses.

Married parents not only contributed more in absolute terms to their children's education than divorced parents ($4,700 median amount per year vs. $1,500 per year; p<.001) but also gave a larger proportion of their income to their children's education (8 percent vs. 6 percent, p<.05). Married parents also outscored remarried parents in absolute ($4,700 per year vs. $2,490; p<.001) and proportional terms (8 percent of income vs. 5 percent; p<.001). Moreover, married parents covered a significantly greater proportion of their children's financial needs, as defined by the cost of the college in which they are enrolled minus aid. Even as children of divorced and remarried parents were found to have significantly lower levels of financial need, married parents nonetheless covered 77 percent of the financial need of their children, whereas divorced parents covered just 42 percent of the financial need of their children (p<.001) and remarried parents 53 percent (p<.05). Using ordinary least-square regressions to predict parental contributions, the researchers found that parental marital status even trumped parental education and income as the determining factor. They note, for example, "divorced and remarried parents who make $70,000 a year are predicted to contribute less toward their children's college expenses than married parents who make only $40,000 per year."

Turley and Demond concede that their findings are "troubling for college-bound students with divorced, separated, or remarried parents." Yet these findings should also trouble lawmakers to the point that they are willing to repeal easy divorce laws so that more children can go to college without carrying the financial baggage of parents who aren't willing to get along.